In the spirit of Ground Hog’s Day, we thought we would take a look back and revisit one of our more popular articles. While it was published a while ago, it is still relevant today. Many organizations are looking for looking for ways to streamline their procurement processes. Knowing what to look for in a procure-to-pay or eprocurement solution can help when researching the right fit for your organization. So here is our Ground Hog’s Day flashback!
What to Look For in an eProcurement or Procure-to-Pay Solution
It is a fact that a Procure-to-Pay or eProcurement solution can significantly streamline efficiencies in the purchasing processes of a company, saving time, money and man-hours. In addition, it can provide cost controls, compliance, and visibility to an organization’s spend that can become an invaluable resource of data to C-level management. Its no wonder that many businesses in every industry sector are considering abandoning cumbersome (and time consuming) processes that rely on traditional ordering systems, and are looking to move toward implementing electronic procurement solutions.
If you are considering making the leap to a totally computer-based procurement system, choosing from the many software solutions and services that are available can be a frustrating experience. It doesn’t have to be.
Perhaps the most important aspect to entering the world of eProcurement lays in answering one simple question: are your vendors ready? If your B2B supply chain includes smaller craft or specialty vendors, it’s possible that some of them won’t be equipped to handle electronic purchase orders. While this can pose a problem, it can also lead to searching out business relationships that can provide you with equivalent products at a lower price point via an eProcurement system. Alternatively, you might want to consider a solution that supports both electronic and traditional ordering processes.
Regardless of how you choose to proceed, there are attributes that you should look for in any electronic procurement system:
Is the system fairly intuitive to the end user, and have a relatively easy learning curve? If the system doesn’t meet this basic criteria, employees who are responsible for using the system will look for shortcuts, and bypass the system-enforced processes.
The selected system must be able to securely process transactions, including both orders and payments. Security upgrades should be easy to install, and frequently updated. Every authorized user should be able to have a separate security / authorization profile in the system that allows them to conduct only transactions for which they’re approved.
A properly configured eProcurement system supports electronic data interchange (EDI) formats that are appropriate for your company. If most or all of your purchases are from North American vendors, then the system should, at a minimum, meet the ANSI X12 EDI standard. If you conduct international business, then the UN/EDIFACT EDI standard must be supported as well.
Maybe most importantly, the selected Procure to Pay or eProcurement system should be scalable as your business grows. As the number of system users and transactions increase, both the front and back ends of the system (access points and databases) must be flexible enough to deal with increased traffic and data queries.
The system must either conform to the current purchasing workflow, or your company must make the commitment to changing the purchasing workflow process in order to meet the requirements of the system. The former is easier to implement than the latter, however, most solutions are based on industry “best practices,” for good reason. If your processes don’t mesh nicely with industry standards for eProcurement, consideration should be given to modifying the internal processes.
Moving from a traditional purchasing process to a B2B eProcurement environment can be challenging, but the potential benefits far outweigh both the cost and resource commitment in making the transition. Taking the time to analyze the available options, and selecting a system that is the best fit for your company makes a lot of business sense in the long run.
Read how Puridiom clients made their eProcurement choice.