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Working towards TCO in a BoM structure – Part I: Common eSourcing limitations

By Silky Agarwal
In Strategic Sourcing
Nov 24th, 2014
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Every sourcing professional is aware of the importance of pricing item tables.  All those building blocks, the color codes, columns that never end, multiple formulae, lookups, logical linkages and what not!  Surely they are complex enough but you can’t help any of it, because it’s what you need to arrive at that holy figure of Total Cost of Ownership.  Your pricing template is a critical factor in bid analysis and bid optimization. And hence, the more sophisticated the Bill-of-Materials table gets, the better it is, for everyone involved.

So what stops sourcing professionals today, from making their pricing item tables as sophisticated as they would like them to be in the very interface of an eSourcing application?  It’s to do with usability issues.  So let’s take a look at what the sourcing professionals go through.

THE BAD USER EXPERIENCE SCENARIO

  • Step 1 – You log onto your eSourcing platform
  • Step 2 – You start building the pricing table framework in the tool
  • Step 3 – You then try adding more sophistications to your pricing table
  • Step 4 – But you hit the limitations of the tool
  • Step 5a – You waste a lot of time figuring out workarounds and end up with an imperfect table OR
  • Step 5b – You finally switch to MS Excel and mail the sheet to your vendors outside the tool
Flexi-Price builder-Part 1

The solution to your pricing table woes.

What this entails is that as a sourcing professional you are unable to capture the data in its true visual format on the technology platform and are forced to leave the eSourcing tool’s premises losing critical records from the tool’s purview while coordinating with suppliers for bid communications and RFP submissions.  This inefficiency results in a rather discontinuous flow of data through the tool, making it an imperfect centralized sourcing technology for you.  It also results in wastage of man-hours, in say, trying to replicate an Excel sheet in the sourcing tool or trying to figure out a workaround for feature inadequacies in the tool.  This necessitates a fundamental technology modification, one that Zycus has cracked!  We shall introduce to you, in our next blog, our very new “eSourcing-desktop integration” – a panacea for all your pricing item table woes.

 


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About "" Has 26 Posts

Silky works as part of Zycus' thought leadership team. She loves to bring interesting perspectives to the procurement profession, thereby providing food for thought to leaders and visionaries in this profession driven to make a difference to their organizations. She is an MBA in Communications Management, a Graduate in Mass Communications. Her specialization lies in Qualitative aspects of the business and the market needs.

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