How to Evaluate and Implement eProcurement Solutions?
From being a Luxury, now the eProcurement Software has turned into a necessity. While the whole World is eyeing towards digital transformation, the main aim of this article is to let the procurement professionals know the process of evaluating and implementing the eProcurement solutions.
The present era of digital transformation is leading to the disruption of several processes. When it comes to the procurement landscape, we have seen major changes, where the function transformed itself into a significant cost saving strategic function from just a mere service function. Perhaps, this led the World eye towards the eProcurement solutions which are transforming the procurement domain which constitutes approximately 70% of the total organizational spend.
What is an e-Procurement Solution?
e-Procurement, also known as electronic procurement, is the automation of the purchasing procedure carried out in between two organizations. viz. Buyer and the Supplier. When the term was first coined in the 1980s, it acted as the Electronic Data Interchange in between computers of two different organizations. However, with the continuously evolving technology, there is a major shift in this sector.
Since it's inception, the sole purpose of eProcurement has remained the same. i.e. to Automate Procurement Process, Standardize Purchasing, Reduce Manual Work Load, Enhance Productivity, Reduce the Operating/Purchasing Costs etc.
While digitization is the need of an hour. It is equally essential that we evaluate the technology prior to the implementation. If not carried out in an appropriate manner, then the eProcurement softwares wouldn't be able to deliver effective results in your purchasing procedure.
Essential Considerations while Evaluating eProcurement Solutions
Here is a simple checklist, which we would recommend to all the fellow procurement professionals for the complete digitization of the Procurement Landscape. For the simplicity of our readers, we will divide the evaluation into three different phases.
Pre eProcurement Implementation
The requirement for any change initiates with a need. Hence, first of all, you should be aware regarding the need for the Procurement transformation in your organization. Once it is realized, you have to proceed further with the below-mentioned steps:
1. Mapping your current Procurement Procedure
What is the Procurement Process at your organization? At this step, you have to track your each and every purchasing action. From the moment when the Purchase requisition is raised, Floating of RFQs, Quote Comparison, releasing Purchase Orders, till the order fulfillment. It is utmost necessary that you don't miss any step at this stage.
Mapping the whole procedure is necessary to determine the key pain areas in the organization. It is notable that the procurement process at each organization is different from others. With the implementation of the eProcurement solution, you are standardizing the process. Hence, completing this step properly will assist in identifying the major gaps.
2. Determining your desirable Procurement Procedure
At this stage, you have to finalize the desirable purchasing procedure. You have to create a sample workflow and an optimum way that would probably assist in solving all the issues which you are facing without eProcurement solutions.
This plan should include the preferred way to float PRs, RFQs, Negotiations, Comparison, Releasing and order and a lot more. We will recommend you to be careful at this step because the same flow will be created in the software. If you miss or ignore any step at this stage, then it will take immense efforts and time dedication for any major change.
3. Identifying the major gaps between both the strategies
Once you have both these processes documented, it's now time to compare both the procedure. While comparing them, you have to identify the major gaps between both the strategies. These gaps include the higher cost of procurement, knowledge redundancy on the various supplier, line-item or transactions, too much manual workload and a lot more.
You have to identify all the gaps that persist in your existing system. Post the gaps are determined, you should consult the eProcurement solution provider regarding the possible ways through which they will bridge the gap in between both the processes.
4. Choosing the Product or Solution which will fill your gaps
While there are many eProcurement solution providers in the market, identifying the one which will fulfill your requirement is not much of a tough task. An ideal solution provider is the one with the following qualities:
- Fulfills all the requirement you need for bridging the gaps
- Possess vast expertise in the Procurement Domain
- Successfully implemented the software at various locations
- Seamlessly integrates with the existing ERP software
- On the toe support system
- Follows best practices in the industry
If this checklist is achieved, then the solution provider will prove as an effective business partner.
5. Determine the Key Performance Indicators (KPIs) for attaining your Goal
With the arrival of this step, you must start taking the note of expected benefits of the eProcurement software implementation. A few among the several value propositions that the procurement automation tool delivers include significant time & cost savings, visibility of the complete organizational spend on a single screen, simplified audit.
Reaching this stage, you will notice that eProcurement software is not just for the purchase department. It also eases the life of Audit, Finance & Accounts and various other departments.
While eProcurement Implementation
Implementation of an eProcurement software is not a terrible task if you have a trustworthy partner. You just have to take care of the below-mentioned tasks for the simple eProcurement implementation.
6. Nominate an internal executive to regulate the eProcurement implementation
For properly using and availing the maximum benefits out of your eProcurement software, it is necessary that you know the way to use it. Hence, you should assign the task to one of your executive, who can learn and preach the colleagues his learnings of the software.
Besides that, this practice will further improve your interaction with the software. Thus, you wouldn't be required to consistently get in touch with the eProcurement solution provider for minor queries.
7. Determine the additional resources you will require
Digitizing your procurement landscape also requires additional resources to be deployed at your infrastructure. It includes desktop, internet facility etc. Therefore, you shall consult your IT-Infrastructure and Finance department and ensure that the eProcurement software is deployed simply at your organization.
8. Document all the non-documented parameters
Documentation is necessary to keep a track record of all the activities occurring in the organization. Whether it is the list of Suppliers, Products, Items, Categories etc. You shall prepare the documentation of all the parameters which remains handy with you.
9. Create a Workflow and assign tasks to everyone
Creating the workflow is necessary so as to prevent any ambiguity in the system. The workflow decides the decision authorization process and assists in determining the tasks which one has to accomplish. Apart from that, it will also initiate in establishing co-ordination in between two stakeholders.
Post eProcurement Implementation
After the eProcurement software is successfully implemented in your organization, now it is the turn to test it. You are required to go through the following checklist in order to do the same.
10. Test all the paths of Integration of the Procurement Software with an ERP
The eProcurement software can be seamlessly integrated with your existing ERP software. It is done for the sake of the easy flow of data to and fro the software. Therefore, once the procurement automation software is deployed successfully, you have to check and test all the integration paths. In this manner, you will be determining the misses, if any during the eProcurement software implementation.
11. Train and Assist your Staff/Suppliers to adapt the Software
After you get the complete hold of your eProcurement software, the next task you have to carry out is training your staff and suppliers about the same.
eProcurement not only digitizes your organization but also your suppliers.
Thus, it is necessary to provide them with training for the successful application of the software. It is necessary to make them adopt the software because no software will benefit you if the users are not interested in using it.
12. Measure the results after a quarter
In order to determine the effect which the eProcurement solution delivered at your organization, it is necessary to measure the results. We would recommend you to keep the results of your last quarter handy for the accurate comparison. If the results are not as per the expectation, you should determine the remaining gaps in the system.
You shall then carry out benchmarking and make the suggestive changes for the further improvement.
We hope that the present comprehensive guide has been helpful to you for determining the implementation and evaluation procedure of an eProcurement software. For further questions and queries, you can get in touch with us.
Read this article, if you want to know How to Convince your Management for Investing in E-Procurement Solution?
Or this one to determine How does Step by Step eProcurement Adoption affect your Procurement Chain?
Anupam Chaturvedi is a Proficient Writer, Marketer, Trainer, Poet, Blogger and a lot more! Always craving to keep learning in life is his main aim. Right now, He is working in the Marketing Department of an Ahmedabad Based Software Company MavenVista Technologies Pvt. Ltd. He is here to share his views on life, marketing, procurement, supply chain and logistics.