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How to Properly Evaluate a Vendor Portal
52 min read

How to Properly Evaluate a Vendor Portal


Welcome to another episode of Convergent IS Conversations where we talk with experts about what makes their processes, whether we're talking about procurement, accounts payable, managing SAP solutions, on how can they do those more effectively, more profitably and with the ability to actually have better ideas and better outcomes than ever before. Today's topic is around how to properly evaluate your procurement portal and this was really.

Really inspired from some conversations I was having with clients about well, where do we actually go to for technology, how do we measure the success of this? Because Kim, this very much feels like it's going to be a cost center and our company is looking to actually eliminate cost, eliminate headcount, not necessarily bring things in. We brought in two experts who are going to be able to share their experience today. As we talk about how do we evaluate this, what are the things that we need to look for and how do we measure the success we are.

Drive. So don't forget to check us out on LinkedIn. Add your comments, we'll be able to address those live. Welcome to another episode of Convergent IS Conversations. Welcome, Michael. Premier. Zach. Shane, Curly. It is an absolute pleasure to have you. Please give us a little bit of your BIOS. Michael, let's start with you.

Sure. Michael Premazak based out of Calgary, AB. I have approximately 30 years of supply chain determent and information technology experience and I love working with organizations to help them optimize those functions and most importantly, save money. It's kind of my thing, wonderful. And I I think most companies are really looking to save money. So this is going to be a very hot topic for for the people that are watching. Shane Curley, let's hear a little bit about you.

Hi, yeah, Shane Curley again also based in Calgary, 25 plus approaching the 30 year mark not quite as maybe as got a couple less years than Mike, but in seating your supply chain roles for some of the biggest companies in Canada have done multiple ERP implementations and E procurement or vendor portal type system implementations throughout my career.

Fantastic. Well, it's an absolute pleasure to have both of you on as our experts and to join us in this round table discussion. So let's get started on this. Like if you're a company and you're looking for, you know different types of solutions, what are those key factors when looking or considering a vendor or a procurement portal? Michael, let's start with you.

I think there's lots of things that come into play. Obviously from the money perspective, you should focus on the cost of the portal bang for the buck. So when you look at what you're trying to accomplish, how do you do it effectively? And more importantly, as you look at some of the cost models, obviously how do you save money using that portal, is it, as you said, Kim, we don't want it to be another cost center. We don't want it adding to an existing cost center. We want to make sure that technology actually enables your company to.

To save some money operationally, potentially has some GNA cost reductions. And I think those are a couple considerations that have to be upfront because there's amazing capabilities. It's how much do you want to pay for it, what do you get out of it. I think the other thing that's very, very important.

Is how do you look at these portals is to make sure they're future proofed. And when you when you look at that technology to me everything is mobile. Everything is going to be done on a phone. There's so much capability in that area it's not even funny anymore. So I look at how do we enable that technology make sure you're future proofs so it can tie into mobility platforms, cell phones, iPads, you name it. It's all important and it makes the experience better. Mr.

And and I'll get to Shane in a second here, right, but I'm glad you mentioned specifically around the cost because it does seem like there is a wide variance in different types of cost and that will somehow impact you know that return on investment. I think we'll talk a little bit more about that here in a little bit. But when we're looking at the cost structure of I mean you know we're often times thinking of like you know maybe a couple $100,000 all the way to like upwards of 1,000,000, right.

Those kind of conversations should definitely be part of that conversation, Shane, what about yourself, right. What are some of those key factors when a company is evaluating A procurement portal, well cost is a big one. So you definitely hit that one on the head and typically an organization would undertake an RFI to actually go to market to actually understand what those costs are gonna look like potentially in.

For that overall implementation and also for organizational fit for the for the tool because the integration to existing systems is critically important Also through that process then you can use utilize the the people that are in the process and the clarify RFP to actually help you build the business case and because approval is going to be critically important in the organization.

And a lot of that will come down to cost getting that in front of your CFO and what I found the best way to get approval from the CFO and CEO is to make it a self funding model. So if you can, you can actually come with a business case that shows no positive returns on cost savings, efficiency gains, some of the things you mentioned that's where at the word level and the C-Suite level.

Is much more easily attained because to your point, these can be hundreds of thousands and or millions of dollars depending on which system you're you're selecting. Yeah, Yeah. And and as like from a sales perspective, like when I'm, you know, pitching different types of software solutions to a company, I'm not just trying to consider that initial capital outlay, whether it's an implementation cost at that first year, but what is that total cost of ownership? It sounds like you were kind of alluding a little bit to that.

When you're talking, you know how do we pitch that eventually to, to a CFO like if I'm an internal person says we need a procurement solution, right. What are some of those other elements that come into that total cost of ownership or things that we need to take into consideration that maybe companies aren't thinking about right now. And typically there are areas where there's not enough resources available to support. So in both IT and then functional support of the tools within supply chain or procurement.

So you know those people may or may not exist today, so they'll need to be budgeted for as well as part of that total cost. And there's also other options you can look at from a hybrid model perspective where the actual provider can provide some of that support. So you're not bearing all that cost on entry and a you can you can contract with the services as well and it's you know there's there's pros and cons of of each model but.

Typically what I found is the the hybrid model and including the actual vendor themselves as part of that overall support team and it is typically what I found to be the best.

Yeah, Yeah. Well and I'm glad you mentioned you know some of these different types of users because I mean you know ultimately I don't think a lot of companies are taking those those positions into consideration. A lot of companies especially this year are looking to eliminate headcount, right. They're looking to to drive bottom line savings, you know payroll being kind of one of the main areas. But if we're having to hire people to manage to to self run these these systems self run, I'm not going to use that in quotes because if we're hiring people.

It's not really self run itself, is it? Michael, did you have something you wanted to add to that? I was just going to say the one thing that's really important when you look at it as well is that it aligns to some of the processes that you're doing that are complementary. So as you look at your vendor segmentation, when you have strategic vendors you really want to focus on because you spend a lot of money with them. For example, a tool that complements that way. And the piggyback on chains comment when you look at the costs here, making sure you're looking at the broad picture of the cost.

Make sure you look at all the incrementals that come with it. Does the portal come complete and stitch right in or suddenly you need to get a license for this? Do you need a license for that? Does it need a configuration Here, those things add up really quickly and you might have the best solution at a great price point. All sudden you find out, Oh my gosh, now I got to spend an extra $250,000 on integration or a or a piece of software that connects it in. Those are big, big thoughts that come in and I don't like to block, get blindsided, I don't think anybody on this call.

To get blind. So I certainly don't want to, but it almost sounds like that that micro, what do they call it like the micro, like micro payments or something like and we're says a trend in general, right. Yeah, there's a big initial cost, but all of these little micro transactions.

Definitely add up, right? I don't know the last time you checked your credit card statement and looked at all the subscriptions that you have on there, like, my goodness, I didn't know I was allocating so much to entertainment for my family. But we talked a little bit about the users, so let's.

Let's go back to those users. OK. So number one, when we talk about just not only how important a user experience is like, first, who are the users that we ultimately need to take into consideration for this? I mean, Shane, you had mentioned a few of them, but what users should we get their opinions before even going down this entire evaluation process? And that is critical to identify all your key stakeholders or users.

And those will be both in the business in the functions as well as the supply chain or procurement team. So as well as your key vendors, strategic vendors and there was tactical type vendors which might be high transaction but low spend. Those are the type of things we definitely want to look at automating.

And get stop touching those $10 and dollar POS. We really want to take that out of the process. That's a huge win and a lot of noise out of the process that the end users will really appreciate.

I you know what and I'm, I'm glad you mentioned those because I think for a lot of companies we don't consider you know the, the low dollar spent, they're not spending enough with us or we're not spending enough with them. Why should we take them into consideration? But your point is they those become the most critical vendors that we need to take into consideration for this because we're spending more money transacting with them, working with them, answering their questions, following up with them then maybe what the dollar value of the transaction is worth.

Is that correct? Absolutely, yes. And doing a proper spend analysis up front will help to identify those opportunities. Yeah, yeah. And I want to come back to that spend analysis. But Michael, for yourself, what other users do we need to take into consideration that maybe Shane hasn't mentioned. I think when you look at Shane, I'll go on the offset on that. I'd say look at your strategic vendors as well because.

Contrary to what Shane's saying, lower transaction volumes but much higher dollar spent. I think the neat thing about the portal there when you look at user experiences is by focusing on your strategic vendors. You can a better understanding of their cost structure, the amount of interaction, but you start to actually get more complementary in terms of other things your users might be doing. So you might have risk management, you might have ESG considerations.

And that's usually more targeted at the strategic vendors. So if we can do more with less and we can do that with the big ticket vendors who are big money, that's where I think you're going to get the biggest benefit and most complementary things coming out of it. And that user experience is what's gold because it's not one more thing they got to do in another tool. It's already been baked into the into a portal. It's already in there. The process is there. Just need to go look it up and it's ready to go.

Yeah. So can you. Yeah, go ahead. Sorry. On top of that then that drives your spend on contract number up and then that allows you to take advantage of negotiated discounts and different payment terms as well. So that's definitely driving toward those strategic suppliers where you're actually measuring and managing performance.

Yeah, Yeah. So then you're you're essentially, if I'm hearing you correctly, what you're saying is instead of spending the time on just managing the supplier, we can by creating a very like a valuable procurement portal, we can take that same amount of time and start managing the way we're transacting. You know, getting better discounts, getting better terms with those suppliers, maybe even entrenching the relationship almost like technology is helping to build better relationships with people. Is that a thing?

Of the truth, common source of the truth is wonderful. My God allows your category management team, and then it also allows your category management team to do what they're there to do and that's actually manage that category and manage the suppliers rather than chasing issues.

Yeah. And if we have maybe any HR people, they'll be like and we have happier employees, happier employees are actually become more profitable, right. They're, they're doing the things that they want to do. They're being creative, they're using those critical thinking skills, which in general from an entire ecosystem, from a company standpoint, we have seen as a massive trend towards creating better employee engagement. But we're not going to talk about employee engagement today. So Michael, right when we're looking, so considering those vendor or sort of these different types of users that we're.

Looking at how do we ensure that we're creating a very valuable experience for them? Like what should we ask them or what should we find out from them to to know that this technology is going to support them in their roles. I think when you look at the different users, I think Shane alluded to a little bit is making sure that the tool actually gives that targeted user the information they need and you have the ability to configure it for different user types.

Category managers are very specific. They're looking for specific things that enhance the work that they're doing, the relationships that they have, understanding the spend profiles. So having a tool that gives some sort of flexibility, whether it be in the interface or in the actual reporting capabilities and dashboarding is critical. And I think that's where there's a big win to make those users happy campers and get bang for the buck because it's all about doing a little bit more with a little bit less.

And a portal can do that. And I think that's the opportunity that's on the table with it, yeah. And Shane, you had also mentioned earlier in the conversation around Rfi's, Rfp's, right. If we're going to launch that, right, how do we measure user experience inside a spreadsheet?

Well, having the some of those key user end users, those champions in both the business units and the different functions as part of that process and actually involving them in developing the questionnaire would actually help to draw those out. So you know you can do surveys or you know different things like that, but actually getting those end users, those key people in the business.

Involved in the process and helping, you know, having them help to craft what those with those questions, the things that you know, what are the pain points for them and then having them be part of that entire process right through the selection. Then when you actually go to implement and roll this out, you actually have that built right in already. So you have those key people in the organization.

Not just in supply chain and decurement, but throughout the organization that will help to support the implementation and roll out. Yeah, yeah, which is, which actually is drives to like kind of like our next question here because getting those other individual users to contribute to any type of questionnaire, I mean the last thing you want them to say is I just want it to be easier, right? I just want it to make my my work, you know, more efficient.

Right. But if we're a business right, we have to be able to measure that level of success. So Shane, how do you measure the effectiveness of a of a procurement portal? Well, there's a number of key ones. We talked about the cost earlier, but in that self funding model, but actual the cost savings achieved and reported and that they be actual cost savings.

So, you know, in my past life I went through a quarterly internal audit to ensure that those cost savings were actually real because that was dollars that were actually coming out of the operations budget. So it would be be critically important that if we said we saved $2.00 on a widget or you know, $10.00 an hour on a service that that was truly being achieved and we weren't getting, you know, additional costs added somewhere else. Michael mentioned earlier about the efficiency gains.

So it's not necessarily always about reducing headcount, but that typically is part of the equation. However, you know doing more with same number of people even as the business is growing. So you can measure it that way as well rather than just looking at you know sheer headcount reductions, the amount of automated transactions. So you can actually report and measure that and.

And that you're actually having that self funding model. So it is truly saving you more as an organization than it's costing you with that kind of total cost of ownership in mind like you mentioned earlier, Ken. Yeah, yeah. And Michael, what about yourself, right? Where do you see the effectiveness? How would we measure that?

I think when you look at the adoption rate that's used in this type of model, it's very, very important. So when you start looking at the adoption rate, you can see how are your users using the tool set, how are vendors being on boarded and being applying the portal and using it effectively to make life better. I think that's part of the equation.

I think the other thing that's important as you look at that adoption rate as you start tying it into how it influences your key performance indicators and chained it allude to it earlier when he was talking about spend on contracts, spend on PO as an example. Well, I think you can baseline your activities very, very effectively and say okay right now 55% of our our procurement is coming on a purchase order but by using this tool we started to push that.

Start to move that 580% and suddenly start to end the best of class and I think that's a very important option rate in a lot of different that's that's pretty well the telltale right there if you get really the odds are your vendors will buy into it it's win win all the way across.

Yeah. Yeah, Okay, wonderful. So, I mean, you know, one of the things that you mentioned, Michael, as well was around procurement portals being integrated, right. What was one of the first things that you had mentioned in our conversation today, right? What is that value of that incurment? So how should we look at having these portals integrated into our system? Is, is a Pi kind of the best way, right? Do we, I don't know, is there a ZAP year that we can ideally use to kind of work with these different systems?

It varies by tools, so it does vary. Different systems have different approaches, so technically there's go with their recommended approach is always the best way to do it. So API's are a great way to look at things. Other tools are actually built right in. When you look at some of these portals, they're actually they install right into ERP systems like SAP. So that saves you a lot of headache, makes a life a lot easier and it becomes part of the core build with SAP moving forward. So that's an opportunity.

And I think what happens too is you start looking at the integration when companies recommend things that way. The neat thing about it is it already starts to differentiate the things you should keep in your ERP and what things you should have in your portal and execute that way. So automation of things, Shane talked a little bit about it, automated activities. There's some things you're going to want fully automated in the portal.

There's some things in the ERP. It just does a great job. They broke. Don't fix it. It's not costing you nothing. Let it do its thing. Replenishment order, off it goes. But I do think when you look at vendors, listen to their advice on how to connect, they usually have done it many, many times. Look for the ones that are costeffective and IT and more importantly, like Shane said, it isn't going to require an army of people to manage that technical integration moving forward.

Yeah, yeah. Well, you know and I I love that you, you mentioned like, you know, keeping it in like, you know as many like as few as few software technologies that you're using, right. We had a conversation I believe it was last month or the month before where we talked about like you know, where do we start? Do we start with the technology, do we start with what we want to do? Personally, I'm a big believer and when you're going to invest in any type of technology, try to have it do as many things as you possibly can right there. There's a certain value in having.

Four systems run an entire company as opposed to trying to have, you know 27 different systems because how do they all end up talking to each other, right, Shane, what is your thoughts, right? Should we look at you know, maybe having something special, right, to do a specialized purpose and then trying to bring the information in because there is a value with that? Or do we look at you know some type of integration and what does that ultimately mean to you? So you need to make it as seamless to the end user as possible.

And that's a organizational decision that you're going to need to make. So do you want to have one kind of front end face? And then like Mike Michael mentioned, you know there's still the MRP and things like that that are sitting in the ERP. But to the end user it looks like they're just transacting in one system, they're not flipping back and forth between different systems. So that's really you know, an organization by organization type approach.

And that's conversations that you'll need to have, especially in intensive industries with your maintenance department and groups like that cuz you're gonna be working in the work order process, those type of things. Do you wanna have them come out and kind of 1 system into another to complete different tasks?

And that's also part of that user experience like we talked about earlier and involving those people from the organization that are those key process owners to actually have that conversation because that then determines your integration approach. And Michael talked about the integration middleware. There's different connectors and all of the different companies tell you that they have an out-of-the-box.

Solution. And that's 40 to 80% true depending on what solution, you know, impact, experience, you know, if it's an SAP to SAP, you know, maybe it is closer to 80%, but if it's ASAP to Oracle, maybe it's more like 40% as an example. Not saying that those are exact numbers, but you know, so you got to consider that.

And those are all things that come out in that RFIRFP process. When you actually get introduced to companies that have been there, done that, what were the challenges they had, you know, through the process and having those, you know, those open conversations to understand what what are, what did other organizations do out of you because there's been thousands of their companies that have already done this. So take advantage.

Of that experience and have those conversations I had at the time and not to find out three months or six months into the process about something. Yeah, well like are you saying that software providers are liars some right? I mean, we can and sorry, not just like salespeople, Kim, but salespeople are always gonna.

Let's just be honest about it. So it's, you know, trust and trust and verify has always been my motto. Yeah, yeah, right. Just just because it's a percentage doesn't mean it's a necessary reflective of your personal business, you know, and that was one of the other things that, you know, we kind of brought up as well, right, is you know, what are those common pitfalls, right. You know, is it, is it a matching rate? Is there something else that we also need to take into consideration, Shane?

Depends the what typically is the biggest challenge for organizations is that they say that they have a vanilla implementation of their ERP, however they've highly customized it. So these out-of-the-box integrations are not out-of-the-box anymore because they've gone and customized their ERP to such a point.

Because they feel that our business processes are weak or special and that they need to go and customize an ERP that you know, a million other companies in the world can use without having to customize. And those are the type of things which turn into lengthy implementation times and team fatigue and team turnover.

Yeah, yeah, Michael, what about yourself, right? Where? Where do you see common pitfalls? Like what should we really would like if you were going to evaluate it under Portal, what would be the big red flag that you're like I can I have to watch out for this or you don't tread with caution. We talked, but I think it's just like.

Talked about making sure you what's all else it's going to take to get home because you never want a surprise at a C-Suite level or suddenly you needed an extra 300,000 or 3,000,000 bucks to pull it off. So I think that's part of it #2 I think one of the things is to make sure when you look at these portals, make sure that they're in mobility native.

So when you start looking at where you want to go, when we talk about technology becomes more and more mobile, the bottom line is where if you miss the point, you buy software that's installed on premise on a desktop or a laptop, you've already missed part of the opportunity. Because a lot of the stuff that's happening right now is total mobility based, where someone might be driving to a location in a field, doesn't have network connectivity other than their cell phone or they need to cache something and then they get back into a wireless area that can connect from there. So I think one of the most important.

One things that we can try to do is make sure you have a big picture of what you're trying to accomplish. Cost wise, technology wise. And I think one of the neat pitfalls that unfortunately gets missed, I don't maybe neat's not the right word is making sure it allies your strategic business plans and your technology plans. So when you look at a portal, if your technology plan is to go mobile, mobile based, cloud based, why would you look at a product that isn't?

You should be looking at tools that have it right out of the gate ready to go. Yeah. We're on the cloud. You want to go on a private cloud? We got that. You want to go on a public cloud? We got that. I think that's those are the pitfalls that come around, hit you in the backside, and suddenly you're paying a lot more money for something. You're going, hmm, not cool. Yeah, yeah, Mobile base, right. Cloud base. Like, where would that specifically be important? Because let's be honest here, right? Maybe that was really important when everyone was working from home, but now that we have like, everyone coming back to the office.

Is it something that we need to spend extra money on? I think at the end of the day when you look at mobility, it's always going to have to be an option. I think there's as we start to let's see the dust settle with the back to office stuff. I think the bottom line is the gauntlet has been laid in regards to mobility, connectivity and I think you have to have that capability because you never know it could happen again. And I think that's The thing is we don't want to reload and have to do it all over again. We should learn from our lessons, not repeat the same mistakes or the same lessons over and over again.

Don't go through digital transformation as an annual exercise is what exactly and both of the big ERP providers are all moving towards cloud based. So to know to avoid having a combination of on Prem cloud and all the integration and connection challenges with that better as organizations continue to evolve.

They're being pushed to move to the cloud. So if that's your organization strategy, you wanna look and select tools that fit with that and that's why having those, the technical folks, the IT people as part of the team are critically important.

Yeah, yeah. Well and and I mean we we mentioned from a user experience right to take into consideration some of our suppliers, some of our, some of the people that were were transacting with, right. Whether we're talking about the strategic high spend, low, low transaction numbers to the high transaction number or sorry high transaction numbers low spend. One of the things that a lot of clients will come to us with is well Kim if we're talking about the, the high transaction suppliers, I mean let's be honest here, these are people with a.

Cell phone and a pickup truck, right. I mean it sounds like mobility is a really big, you know ask for those types of of contractors, for those types of employees. Is that always going to be the case? Like should we really consider how people work, right, not just necessarily how we want to work? What, what do you think about that shame, right, Like do we ask ourselves how are our suppliers actually working as a part of this entire conversation?

Well, I'll give you an example of where we were and where we've come to in the early 2000s. When I've heard about your Canada, all of our field based you know project managers and folks out on the drill rigs and things like that had their F-350 with their big antenna on the roof, their Startac Motorola flip phone and their fax machine and that's how they got.

Got job done. So they had a multi part form for PO and they were able to fax that to the local supplier to get the services or the equipment materials that they needed. Today with iPhone, Android people are they're used to using applications.

Right, so nobody else to tell you how to install an Apple an app on your Apple phone, right? Anybody that has an Apple phone typically knows how to do that. Similarly, with these type of systems, you want people to be able to intuitively use the system and follow the process. So you need to make it simple, right? And you need to be able to walk the people through the process. People need to be able to figure this out.

On their own without hours and hours of training. Similarly on the supplier end, we need to integrate with the suppliers and make it easy for them as well to either accept the information whether it's through an e-mail or other other applications or you know for those ones where you're doing higher volume of transactions, actually do an integration with them so that the information can come right into their system.

To help them be much more efficient as well, they shouldn't have to add multiple people to your account to for Insight Sales. To actually be able to manage the transaction and the data back and forth, we need to look at opportunities for automation throughout the entire supply chain.

That well it also becomes you know like counter intuitive to why would we invest in technology anyway if we're having to hire people to manage vendors. Now like that being said, right, there's plenty of other software providers are out there, they're like listen, we don't even need to offer training because it's so self-explanatory, right Michael, what is the risk? Maybe that's one of the pitfalls or one of the red flags that we need to look at, right. But what is the risk of a company saying we're so self-explanatory that we don't even need to trade you?

I think the concern it always comes up there is an A loosey goosey process can have end up with loosey goosey results and you may not get what you intended. So it might be an intuitive application, it might guide you through the process. I think the opportunity with these kinds of tools is to make sure that the tool is as as delivered simple but guides you through a desired process, not an undesired outcome.

And if you follow a desired process, you're going to be in a very good spot because it doesn't let a user do things too far out of the boundaries. But it also gives the flexibility they need when there are exceptions, when they have to put in extra information or or clarify why something was procured or something of that nature. And the tool lends itself to that. So I think those are things I would definitely look at with a degree of seriousness to make sure that yes, you know what we're going to guide you through. It will give you a little flexibility.

Well, let's not get too carried away here is kind of the way I would look at it. Yeah. Yeah. So I mean and that kind of brings us into like is that vendor or that Technical Support, right? Is that really important, like if we've set it up right the first time?

You know, should we require a lot of Technical Support, like how much? I guess maybe more of the question is how much, right? Should we have it set up the first time? Should we look at this doing in phases getting Technical Support to help us build this or should we look at doing this like all at once and it should be done? What do you think, Michael? Depends on the organization, but.

Opportunities to do lessons learned. The phases can be very tight. They don't have to be spread out over years, They can be spread out over months or weeks in some cases. But I'm a big fan of that because there's lessons learned and I think it gives you a little bit of a hot spot or heat mapping to say where are you getting some questions coming up. Because there might be some policies in organizations around the current of restricted goods or something that nature gives you an opportunity to course correct really quickly.

And then as you start looking at support resources whether it be your direct team, your in your in your permit team or technical team or a help desk, it gives you the time to say okay, what kind of volume can we actually expect from people? Because I think that's that's part of it too, is it's you're going live with the system, how big of a bang is it going to be? Don't know phase gives you the opportunity, he's into a little bit so.

Shane isn't even possible to do a phased approach if you are making like this massive investment like we're talking about integrating inside an ERP system, right? Like it doesn't seem like there is a halfway switch between the light being on and the light being off. Well, we talked about on premise versus cloud earlier, so it makes a big difference the the on Prem system that's typically where you get into customizations.

And then when you're integrated with a vendor portal which may have monthly or quarterly updates, that's where things can go wrong and start to break and those connection points. However, if you're in a cloud based tool and cloud based ERP, in that case when you're seeing monthly and quarterly updates and refreshes, it really lends itself to no customizations.

It's configuration and you can over configure systems almost to the point of customization. But it's critically important in cloud based tools to avoid any customization because it's going to be very costly and additional support due to manage that especially between monthly and quarterly updates.

And and and Shane, I mean you know, because the moment you start to say customization like I'm just thinking like big dollars like I'm thinking like like that is really expensive. But often times I feel like most of those customizations only become because of a user like user feedback, right. So do how much should we incorporate that user feedback right if we are going to have to balance between costly customizations and like you know the the person who says I really want it.

To look purple, do we, do we involve that right. How do we balance that out? Well and you're right, it's typically because of you know we're we're special. We have a you know special tax jurisdiction in Saskatchewan or something different in BC with withholding and those type of things and people try to go in and manipulate the system to actually.

Their expectations of this assess, however, what I found in the past is you can undo those customizations and go back to the ERP. And there are other ways to manage that, but you need to have the expertise of those providers to actually help you through that process versus trying to kind of muddle through and manage it yourself and that goes to overall implementation.

Is it, you know, are you having the vendor of the portal help you with the implementation or lead the implementation, or you're going out to a professional consulting firm to actually help you with that? At the end of the day, you are always going to need the software provider in that mix to help with that process because you know they own that proprietary software and they're best suited to have that knowledge.

Not, you know, not necessarily a large company firm. They're not going to have all the information about the future state roadmap of the tool, where they're going, those type of things. So it's critically important to have the the software provider as part of that team.

Yeah, Yeah. So, So I mean almost like you don't have that conversation with the software provider, find out where in the role map maybe some features, maybe some functionality may come in and then you know ultimately determine do we need it now for an additional cost or can we do without for a certain period of time, right.

Michael, what are your thoughts, right? How do we involve that, that user feedback, right, so that you know like if we're going to invest more or if we're going to invest at all, right, how do we ensure that that's taken into consideration but not to the cost and the detriment of the company. I think I think Shane's hit the nail on the head on a number of things regarding the the user feedback is very important during the evaluation process.

I think during the evaluation process, you do have to make sure what they see and what they actually see from the software is relevant to them. So that may actually look at a process that isn't something that's necessarily baked, but something that aligns very well to what they're doing because they'll immediately resonate with it and say that makes sense. That makes perfect sense for what I'm trying to do. So I think that is where the opportunity comes. I completely agree with Shane, when you take a look at the strategic road map of both the organization and the software company that you might be dealing with.

That road map probably shouldn't concern the evaluators as much important. I think that we get their fact that they give some insights in being relevant to them. So it's not just another and it gives them some insights we'd like to go as as an organization. Because these tools, one of the nice things about these portals they putting a new piece of technology into your ecosystem of software is also what's going to go out.

And I think that's the opportunity because during these evaluation sessions you will have people saying, well we could use this portal then I don't need to use this anymore. And that's where you can see an immediate opportunity for additional cost savings, additional GNA components. So I think there's, it's an important thing to have and as Shane said, keep it in a bit of a box and you'll be very successful with it the the.

The principles for the overall digital transformation and is part of this process. It's critically important for people to understand like I mentioned earlier, going to cloud avoid customizations. Let's not take antiquated broken processes and try to push them into a new system. Let's actually if you've got thousands of companies that have gone ahead of you and they've adopted all the best in class processes in the industry.

Why do you wanna go in and change all that and modify all of that? Why not start with best in class, and then if there are specific use cases or business cases where something needs to be changed, then evaluate that on its merit. Yeah, yeah, absolutely. Yeah. And so when we're looking at how organizations get that value's worth, right?

What what should they like if you had to choose one KPI, right, Like if we're going to be able in 12 months show that you know any investment we made, whether we're adding customizations, whether we're taking it out-of-the-box solution is going to get us the value worth, right. What would you ultimately look for Shane? So I'm going to give you it depends answer because Mike talked about this really about strategic goals of the organization.

So what are your strategic goals for the next 135 years and you want to along to the so whether it is cost savings you know efficiency gain potentially headcount reduction, SGNA costs, more automation, ease of use for their end users there. You know there's a whole lot of things that that are you know out-of-the-box measurements that you can take from these different systems.

But they need to align to supply chain procurement goals and to the strategic goals of the organization because that's what will actually resonate. You can, you know you can measure 25 KPIs, but if they are not aligned to the organization and it seems like supply chain is self-serving and in this process that's.

You know, and that's not gonna be well resonated at the, at the C-Suite and the, you know, the heads of business unit level we need to align to what are those business unit goals? What are the overall strategic goals for the organization. Yeah, yeah, what, What would you measure, Michael, if you were to give somebody an evaluation, right. What would you tell them Like this is the one thing that you ultimately need to measure for?

I think Shane hit the nail on the head on that one quite in a complementary way. I think the one thing that's part of Take Holder Group as well and should be is your technology team. So as your technology team gets involved in these types of participating in these types of decisions and evaluations, I think it's very critical that the technology team sees how this furthers their technology road map that they're trying to execute. As Shane indicated, there's a big push to move toward cloud based technology.

Well, is this a step in the right direction? I'll give you an example. At a client I was doing work at good size client, not global, but certainly Western Canadian premise. They had well north of 2500 applications in the organization of which less than 5% were in any way cloud enabled. They were all on premise decoded, install kind of stuff, servers and mobility that was limited at best.

So when you started presenting portals as a move forward plan, being cloud, native mobility, native out of the gate instantly. It's not only promoting the business as Shane said and moving some KPI's the right direction from a business perspective, but what about your technology KPI's to maybe be by 2000 thirty, 7590% of your applications are all cloud hosted. And again what does this portal remove? Because these portals not only are great at transactions.

They're also very good at reporting and maybe you can use this tool set as a natural reporting at engine and eliminate some of the custom stuff you got on the side that's you know generating APO on spend type report where it's like well guess what it already does it for you. So, So I'm being nice to the technology team because I rely on them so much and I got you got to give the technology boys a plug because they're always good folk. Yeah, absolutely. Well, yeah, go ahead, Shane.

Sorry, just to follow on that. So Mike and I have been through a couple of the largest mergers in, in Canadian history. So that definitely resonates you know the large number of applications. But the other side of that is actually readying yourself as an organization going into that merger or in that acquisition especially if you have a large number of acquisitions planned and significant growth for the organization to have your tool set.

Well established in the organization and ready so that it can be the system of choice for that. You know when we go into that merger or going with that acquisition being able to rapidly deploy that into that first organization or the acquisition in a very timely manner. So that that's critically important actually to get the value.

A lot of those mergers and acquisitions is to be able to rapidly deploy the systems that are well established, well documented and are working well for the organization. Yeah. So I mean and that's a great point, right, because.

We, we talked a lot about you know, ensuring that we're investing or we're taking consideration that total cost of ownership, right. But you're also saying you know how fast can you get the system out there, how fast can can we get it set up. Like one of the things that often times a lot of these procurement portal providers will say is like, well we have a very vast network of suppliers that are already on our network, right. Is that something that will help us to ultimately deploy this a lot faster? If I was you know a company says listen we have millions.

Of suppliers on our on our Business Network, right. Is that going to be one of the defining factors like well, yeah, absolutely we want to have that going forward because it's going to help us deploy faster or is that one of those suppliers or providers or liars types of conversations, Shane. So again, trust and verify, so as part of that RFI, RFP process.

Actually have them validate that. So give them either your full list or at least a sample of your kind of key strategic suppliers based on your spend analysis and actually have them run that through and come back to you with that information. That should definitely form part of your evaluation because they may tell you again that it's an 80% match, but when you actually run the data, maybe it's a 40% match. So doing that onboard supplier onboarding.

Is a significant effort with some of the tools And so is that going to be done by the vendor or is it going to be done so the software provider and then you're going to end up paying for that or you're going to go have to staff your own team to do that? And then how quickly can you get there to actually get efficiencies because you need to have those suppliers on boarded and transacting through the system?

To actually get the gains that you're you're stating in your business case, yeah, there's a significant difference between having them on the system and actually transacting through the system. It reminds me of all the people that have, you know, AOL e-mail addresses, right? You know, having just because you had one right doesn't mean that you ever deleted it. It just you stopped using it and you've kind of moved on since then. So having AOL says, yeah, we have millions of users.

Doesn't necessarily mean anyone. What was the last time anyone checked their AOL e-mail address? Michael? What? Any thoughts on the last thoughts on this one? I think value worth I'll circle back to the important thing that Shane said is looking at your Kpi's. I think it's important to say when you start looking at those best practices, what are the enabling actions that get you to those Kpi's? So common tool set, common things.

A common KPI is moving your PO spend on the contract and and getting your spend on the P O's or contract I think is critical and how you start to move it across. When we've done analysis of companies, it was shocking to see how much spend there was that never saw a purchase order and not on a contract And it was you see the poor executive usually Shane have a small heart attack and and then we would go through it and say OK what's the plan because you're not going to presto change over it, it's never going to happen.

But you know, if you can start to move that over to the best in class ratio to be at 90% as an example is on, on on PO's or on contract. Now we've got something to discuss because 10% usually can be explained, at least the organizations I've worked in say you know what, completely legitimate. We had an emergency. Yeah, we're not going to wait for a P to be generated that we're just going to go pick up the running. And I think those are the things you need to let and keep it real so.

Yeah, yeah. I was working with a client. They said 65% of their transactions were non PO base, right. It was, you know they they asked us a lot on how do we go ahead and.

But you know what? And then, I mean, you know, you talked a lot about the different departments, right? But I mean like this was something that we ultimately looked at. We asked ourselves, OK, you know what, it's not just, it may not just be one KPI, but it should be one KPI per department, right? What is the accounts payable metric, right? What is that procurement metric? What is that sourcing metric? What is that supplier discounting metric? And when we start to combine that, that becomes the holistic big picture that actually impacts that total cost of ownership.

Absolutely. So as we kind of wrap up here, right, what is one piece of advice that you would give to any organization starting their evaluation. And as we kind of put this, I'm actually going to put up a QR code. We actually do have a a vendor comparison download you can go ahead and download. Michael, let's start with you. What is one piece of advice you'd give to an organization?

I think one thing is, is look at the opportunities that the portals give you above and beyond the awesome functionality that all of them have. Look at the cost, do all your homework and stuff, but look at what else it can be complementary with. Because when you look at those portals and you look at specific ones, they help you understand your vendors better and better. And one of the nice little outcomes of looking at a vendor portal is you can actually reduce your footprint of vendors because you start to realize I need to play with these vendors because they align to me business and technically.

These ones don't. So why do I have them? What do I get out of it? Maybe I can consolidate it. So my little piece of advice is keep an open mind for what else the portal can do, because there's so many great things that it can bring to the table. Yeah. If you're gonna invest, how do you maximize that investment, Right. You know, how do you get it to do more than just one thing? Shane. One piece of final advice. Well, I'll put a little plug in for convergent is and and their portals that they've developed.

And they are really rapid deployment. So you can get value faster and help to automate processes and then they can be a stepping stone to an Arriba or a Cuba or something else larger potentially down the road. But I mentioned earlier about talking to other companies that are using the tools to really understand, is this tool an organizational fit.

And you know what are those challenges, what are the, what are the pros and cons, those type of things. There is, there are a lot of portals out there in different systems. There are you know, bodies like Gartner, Forrester, companies like that that spend a lot of time rating these systems And so you can gather a lot of that information yourself without having to go into that RFI, RFP process.

You know get out on the on the Internet and and do some searches and then start having some conversations and that's really where you're going to get down to understanding you know the pros and cons, the transistance and processes and we talked about you know what are those strategic goals for the organization, what are we trying to achieve so and having that as a basis of understanding.

Yeah, Yeah, absolutely. Absolutely. Right. So it's not always the most expensive option. That's the best one. Often times it's like, you know, taking a look at, you know how others have already used it, how fast can we ultimately implement? What departments are we impacting and how are we measuring those, measuring each department and their contribution to the overall effectiveness and what is our longterm plan and strategy as a company, what works for today?

Than what works for the future. Thank you so much gentlemen for for your time today. If people want to follow up with you right? Where is the best place for them to reach you? Michael, LinkedIn is fine. They're all easiest way probably to connect with them. Yeah. And Shane? Yeah, same LinkedIn. It's probably the most straightforward way.

Well, you're already live with us, so thank you so much, gentlemen. It was an absolute pleasure to have you. We're going to be looking at for next month. We're going to be talking about how to manage an SAP project to make sure it's done on time and on schedule. If you're already following our page, definitely take a look and check that one out when it isn't. If you're not following our page, hey, this is a great opportunity to make sure that you're going ahead following us as we go along. We talk about a lot of things, everything from.

Procurement to supply chain, helping your company ultimately save time, money and become more effective. Using technology to automate things as they go forward. Hey listen, if you're not looking at a vendor portal or procurement portal, one of the things that our team did not mention today is what are the systems that you ultimately use beyond the vendor portal to communicate with your suppliers. One of the biggest things that we like to say here at Convergent IS is that e-mail is not a vendor portal. Let's take a look at that video now.


Thank you. From everyone from Convergent IS our guest this week As we continue on our Convergent IS conversations. It was an absolute pleasure to have you join us live. I hope you continue to join us for all of our future events. Hey, don't forget to connect with myself or any of our experts after this conversation. If you have more questions, you want to talk about it, you want to talk about evaluating procurement portals or just procurement in general, we're here to chat. It was an absolute pleasure.

Here's to another episode of Convergent IS Conversations.

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