Services e-procurement
Excerpt
For Sony Electronics based in San Diego, California, the motivation behind its adoption of an eprocurement
system from IQNavigator in June 2002 was a combination of both improved sourcing and
a better procure-to-pay process, explains its director of corporate procurement, Walt Sindewald. Of the
two, the procure-to-pay process posed the bigger headache. The existing paper-based time-card
system meant that costs for temporary labour were not only difficult to reconcile – hundreds or even
thousands of workers at locations all over the US, including Sony retail outlets – but "lumpy”, with
irregular billing and payment patterns.
The sourcing decision was taken care of with the switch to a different agency, explains Sindewald. The
relationship with IQNavigator came about because the agency in question recommended it, prompting
Sony to forge a relationship with the company and begin using its tool not only to raise requisitions for
temporary labour, but also to reconcile the actual use of that labour, authorise payment and then
transfer the money. Almost at a stroke, says Sindewald, Sony’s procure-to-pay difficulties evaporated.
"The system is hooked up to time clocks, and as someone ‘badges-in’ or ‘badges-out’, it updates the
database.”
Although Sony has since switched temporary labour agencies again, it has continued its relationship
with IQNavigator, insisting that any subsequent agency uses it rather than introducing yet another
requisitioning and payment processing tool. "Agencies sometimes believe that they should control who
the software provider is, but one of the best decisions we’ve made was to have an independent
contract with IQNavigator,” he says.
Instead of having the records of its consumption of contingent labour spread across several systems
and databases, each relating to an engagement with a particular supplier, Sony now has a single block
of data going forward into the future. Just as importantly, it no longer needs to worry about the
introduction of any new systems that might be associated with a change in temporary labour agencies,
which (as agencies are well aware) act as a source of "stickiness”, making companies reluctant to
switch agencies in the first place.
It’s a rationale that, writ large, is arguably driving much of the direction in services e-procurement at
present. If you’ve got a system that you like, runs the argument, and which delivers the functionality
you want in respect of temporary labour, why not build on it and extend it to take care of the eprocurement
of other services? And, in the process, retain not only a familiar common core of
administrative processes, but also a body of data. Data that, what’s more, can play a critical part in
more effective sourcing.
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