After 6 years at IBX and numerous eProcurement implementations, here is my 8 point list of advice on how to make eProcurement a success. Pls add what is missing! Another one can be found here: http://www.spendmatters.com/index.cfm/2008/8/11/Your-eProcurement-Implementation-Sucks-and-What-You-Can-Do-About-It
1. Base the implementation on a detailed spend analysis
As in any larger sourcing intiative, a proper eProcurement implementation has to start with a detailed spend analysis. Through this you are able to define which suppliers to prioritize and call-off methods to use.
2. Vacuum the organization on agreements
To build up good content, you need to vacuum the organization for agreements. My experience is that purchasing seldom has them all. Especially all types of service agreements are scattered around the organization. Try to get a grip of them all and, based on the prioritization from the spend analysis, transform the agreements into a easy to understand content for the eProcurement solution.
3. Implement the entire end to end P2P process
Most eProcurement implementations leave out the eInvoice and Matching part. By that you loose a lot of the potential process saving and even more importantly, you loose an important adviocate for your initiative –the Finance department.
4. Establish or buy an Operational procurement function
The early adopters of eProcurement hoped that the self-service model would make it possible to take away the entire function of operational purchasing. But as things have matured, I think most organizations have realized that employees that do not buy too often, need someone to call to get assistance. Also, for more tactical purchases, i.e. where there is no frame agreement in place but the spend value is high anyway, purchasing should get involved. Hence an operational purchasing function or Service desk is needed.
5. Use a category based approach
All categories are different and are bought and paid for using dirrerent processes. Temporary labour has a different process and a different set of content than for example IT hardware. Therefore, to be sucessful you need to run each category as a small sub project and build up its new process and content. When mapping the current processes and suppliers, you get the advantage of talking to and involving the key buyers/stakeholders in the categoty. That improves the compliance. Most of the marketing job is done before the shop opens.
6. Go beyond catalogue buying
Early implementations had a heavy focus on catalogue products. Unfortunately only a small share of the spend is suitable for catalogue buying. Large categories such as Professional services, Facility Management and Telecom are less suited for catalogues. To get a good coverage, 4 types of channels are needed:
- Catalogue and integrated web shops
- Service mall to present service suppliers and their agreements
- Assisted buying with spot sourcing tool
- Payment plan to get matching on non-PO purchases
7. Sell and enforce
Sell the new way of working and implement a policy stating 100% usage. Follow up through standardized emails if invoices lack a PO.
8. Measure success and take corrective actions
Establish a set of KPIs to follow the progress on category and org unit level. Improve content and communication in problem areas.
