Critical success factors in electronic sourcing system implementation process

Successful implementation requires for example management’s support, informing the employees and other stakeholders about the change, training and involving of the employees, developing of metrics for measuring the success and the potential savings and reserving enough resources for the change project. (Tekes 2005) According to Chaffey (2015, 472) success factors in digital business change include the following factors;

 “management buy-in and ownership

 effective project management

 action to attract and keep the right staff to achieve change

 employee ownership of change”

According to Neef (2001, 138) eSourcing implementation requires broad change and project management. It is important for the key executives to understand the risk and benefit related to the project and also there needs to be organization wide sponsorship among the organization leaders. A third important aspect is to have a strong and honest communication plan, which would concern the project approach, schedules and the effect that the project will have in the organization. A fourth aspect is to have a broad input and participation among the different levels of the organization. Broad change management is important since unless the changes to business processes and employee work behavior is dealt with, the same old mistakes and inefficient practices are just make in real-time in the eSourcing system.

According to the research of Mose, Njihia and Magutu (2013, 375-376) critical success factors for the eSourcing implementation include following aspects; employee and management commitment to the success of the adoption process, reliability of the information technology and supplier performance, monitoring the performance of the eSourcing system, user acceptance of the eSourcing system and top management support.

The challenges in the success of the implementation commonly were the resistance to change and lack of managerial support. There are several aspects that organizations should consider in order to make the eSourcing implementation successful. The factors include; user acceptance of the new IT system, early supplier involvement, employee training, top management support, measurement of the key benefits and re-designing the affected

business processes. The establishment of goals and baselines is very important in order to be successful in the adoption of eSourcing tools. By establishing goals organizations are able to measure the state of the progress of adoption of the system. It is also important to define the key performance indicators (KPI’s) during the early state of the project so that benefits can be tracked and converted into measurable KPIs. (Mose et al. 2013, 375-378, 380, 387) Also Neef (2001, 196) state that identifying and recording an accurate KPI measures is also an important factor in a success of eSourcing implementation projects.

Moreover, Neef (2001, 188) states that successful eSourcing implementation projects have the following characteristics;

 executives understand and agree on the goals, approach and project timeline

 the project itself is planned and managed organization widely

 the project is coordinated and managed through strong and participative project management through which structure, clarity, integration and direction is provided

 project is meant to clean up the sourcing work processes and techniques

 change is managed through a change transition plan

 enthusiasm is created and resistance to change is reduced through comprehensive communication plan

The resistance towards electronic sourcing can be reduced with clear communication, sharing knowledge and interacting with the different stakeholders. In order to the electronic sourcing to be successful in the long run, organizations need to make sure that they follow their commitments, targets and continue developing consistent sourcing processes. In order for the transformation from traditional sourcing to electronic sourcing to be successful, a full-scale change management activities are required. Implementation and change management are the most challenging parts of the transformation because it is very much dependent on the organization itself. Change management requires vision, commitment and leadership. As any other change also electronic sourcing transformation needs a broad support, clear implementation plan and continuous communications to all of the stakeholders involved in the change. (BuyIT 2004, 24, 26)

Communication should be open and consistent thorough out the implementation. It helps in ensuring the internal buy-in. and is typically a critical factor in the success of the project.

The communication to employees should include the following aspects;

1. “what is happening”

2. why it is happening

3. how it will affect the employees 4. when it will happen

5. what employees need to do

6. how employees will be provided further information and updates 7. how the company will know when it is successful” (Neef 2001, 195).

Figure 15. Implementation of eSourcing tools (BuyIT 2004, 26).

Figure 15 summarizes the areas and action points that are most important in eSourcing implementation projects. The most important areas are leadership, communication, sourcing process reengineering, technology implementation aspects and the overall management.

Change management should be related to all these aspects. Vaidya, Sajeev & Callender (2006, 71) have identified more specific success factors in the eSourcing implementation;

Leadership

 end user uptake and training

 supplier adoption

 compliance with the best practices for business case/project management

 systems integration

 security and authentication

 re-engineering the process

 top management support

 performance measurement

 change management

 eSourcing implementation strategy

 technological standards

As can be interpreted from the list below and also previous sources eSourcing system adoption and successful implementation requires thorough change and project management, communication to the internal stakeholders and also to suppliers, developing new ways of working, enhancing the internal buy-in by showcasing successful examples and sharing best practices between the internal users. Also establishing KPI’s and common practices is very important in order to success in the implementation properly.