Exploring the Not for Profit procurement differences

Contents

1Introduction

Are you in the market for a new eProcurement platform? To help guide your search, we’ve compiled important considerations and questions for you, relating specifically to addressing automation of Indirect Procurement.

Indirect spend can be complex for an organisation to manage, because it covers many categories of spend and many purchases are unique in nature. Specifications vary, prices change and supplier performance is often variable or unknown.

Any eProcurement platform needs to help you gain more control over overall spend, including Indirect Spend categories. Providing a streamlined, standardised, and automated  procurement process for your users within the organisation. Indirect Spend solutions need to be flexible and highly configurable with bespoke capabilities. They need to be easily adaptable to support fluctuations in demand, business cycle changes and varying business working practices.

Let your eProcurement platform take care of the buying, so you can worry less and engage more with your suppliers. You’re the Procurement expert and technology shouldn’t get in the way.

This article provides some useful tips and recommendations to aid in the analysis and selection of a procurement platform that will address Indirect Spend categories.

2Focus on Facts not Fiction

 

Fact: Not all eProcurement platforms are created to address the challenges of Indirect Procurement

In context of Indirect Procurement, there’s a lot of false claims about what eProcurement platforms can achieve

Systems that are specifically designed and focused for Indirect purchases will always have a significant edge over more generic platforms. Plus, if they integrate to these more generic systems then this is a definite plus.

Depending on the size and nature of your business, this Indirect Spend platform may be your only investment in automation. However, if you do need a Strategic Procurement platform do not assume that this will also efficiently address Indirect Spend. The addition of an Indirect Spend Platform, that is integrated to your Strategic platform and focused on efficiency in this specific domain, can have a significant organisational impact.

Indirect eProcurement cloud-based services can create major gains for your business.

Here are some good general indicators of what to look for:

  • The primary focus of the platform is Indirect Procurement
  • It should be an intuitive and ready-to-use solution. For Procurement, employees and suppliers
  • Everything should be managed in the cloud, so you can access your account from anywhere, on any device. This is really important for Indirect Spend.
  • It should be just as easy to use in a central location as it is locally
  • Adding and managing catalogues and suppliers should be under your control
  • The solution should be a pay monthly subscription fee, which helps you forecast your total cost of ownership
  • It should have an open API for ease of integration with your existing systems and processes
  • Staged implementation should be supported, to enable quick gains and minimise organisational impact
  • The latest technical, compliance, and security feature updates should be included

Fiction: Implementation for Indirect Spend would take too much time

This is fundamentally not true. With SaaS, you can implement by category and engage stakeholders over time. Focusing on high spend categories first and achieving rapid gains in just a few months.

When evaluating your options, look for a platform that offers ease of use and process step flexibility to enable you to customise from day one.

Select a vendor with a track record, over years, in the Indirect Spend domain. There are many hidden issues in this domain and vendors new to Indirect spend may not have the knowledge or size to deliver on promises. Plus, ensure that your shortlist of vendors includes vendors investing appropriately in key new technologies.

Selecting the right solution will allow you to reinvest your time and budget in supplier development and strategies to minimise costs and maximise on opportunities.

3Define your Solution Needs

You wouldn’t buy a car without knowing what features you need—or which ones you can afford. And who’s going to take care of the repairs and insurance?

Before you shop around for better software, you need to have conversations internally to identify key needs. Understand which features address appropriately specific needs and the support you will require to keep your operations running smoothly.

 

The right solution for your business

We’ve already described in broad terms what to expect from an Indirect eProcurement solution. But how do you know if a specific solution is right for you? And when should you make the move to a new system?

Firstly, ask and answer these questions with stakeholders to be able to scope the impact needed:

What issues are there in processing Indirect Spend orders specifically? From a user, supplier and Procurement perspective.

Has the current system failed users at critical moments?

Do you hear or say, “we can’t do that” or “it takes too long to…”?

How many spread sheets are there to support Indirect procurement activity?

Is Procurement involved in day to day transactional activity

Does your Procurement team spend too much time and energy on processing transactional activities?

Is Procurement overloaded with emails dominated by questions, complaints or order/supplier update requests?

Are you getting involved in micro managing stock levels?

How complex are your systems and processes to manage Indirect spend?

 

Then ask the following, relating to the proposed solution:

 

Are non-standard items managed?

How easy is it to add a new product or supplier?

Is it possible for users to point and click for regular purchases?

How are interactions handled with vendors?

Can orders easily be reconciled with goods received and invoices?

What reports are available?

Are e-catalogues currently supported? Ask the question do catalogues need to be locally branded, supporting local languages and currencies?

Can cross border taxes be handled?

What currencies and languages are supported against what you need?

 

With the answer to all these questions, look at the long-term cost to your business if you don’t make a change. Both in terms of resources to process Indirect Spend items and also in terms of lost savings opportunities.

So, if based on the answers to these questions, all roads point to migrating to a new platform, let’s review how to prepare for that next step.

 

 

Your migration timeline and full scope of work

When evaluating solutions, communicate your desired launch date up front. It might seem impossible to migrate your site in just three months. But with the right platform and support, it can be done.

Document the full scope of your requirements. Here’s a helpful place to start:

  • What’s your implementation budget?
  • Who will be migrating your current suppliers and procurement data?
  • Define the must-haves, in terms of functionality, for your solution
  • Identify key processes that need to be automated to save you time and resources
  • What can’t you do on your current platform that must be solved on the new platform?
  • Analyse where you spend most time and how the new platform will impact on this
  • How many products, users and suppliers need to be migrated?
  • What team resources do you and your supplier have to support the migration? Is this sufficient or are more resources required?
  • Check the ideal time of year that you can get the maximum team support

Your required customisations and product integrations

It’s helpful to map the technologies you currently use. Then, platform providers can clarify which of your daily processes will drastically change and which will stay the same after the migration.

For instance, you might need to integrate your existing eProcurement or stock control software. Everyone uses eProcurement solutions differently. It’s likely you’ve built customizations into your current tools, making it essential to use tailored integrations or connectors with a new platform.

Your prospective platform representative should be able to help you scope out the integration work. Doing so up front will solidify required changes and highlight where you might have issues during migration. Be sure to check your resources that will be needed to focus on customisations and integrations.

Your team size and project stakeholders

The rule of thumb is that the larger your team, the more complicated it will be to migrate. However, this should not be the basis for excluding Stakeholders from the process.

Identify all key stakeholders to avoid misunderstandings about platform capabilities. Involving these stakeholders in the final decision will save you time later on.

Focus on specific categories or teams to start the process. This will reduce the number of stakeholders for each phase and accelerate the overall implementation activity.

Within each user group identify super users who can help other users to understand how to use the system. This will reduce the support required from central Purchasing groups.

4Challenge Everything

It is important that you challenge. Do not assume that the solution must address your issues if other companies are using it for Indirect Spend. Here’s a list of essential questions to ask any eProcurement platform provider in relation to supporting Indirect spend:

Is the solution fast?

If order processing takes too long users will take short cuts or not use the system at all. Can the system support high-volume transaction activity and ensure time spent on each transaction is minimised for Users, Procurement and Suppliers. 

Does the solution integrate with current systems?

The best platforms are tech systems agnostic. Check how they will integrate to any systems that are essential to your current business operations. Plus, are they agnostic towards possible future providers of these systems?

Can the supplier help with integrations when you migrate?

It is important to understand what the proposed solution provider can offer in terms of integrations. Are they offering only an API or are they offering to develop an integration and support the integration?

What capabilities differentiate the solution in the market?

Know what’s possible when customizing the solution in context of your processes. Specifically, in terms of addition or removal of process steps: for indirect spend process steps will vary and it is important that you can adapt the steps to your organisational needs.

How long is the migration process, and how does it work?

Make sure you know how long the overall migration project will be. Including your own data migration / cleansing activities, as well as those of the supplier. Also, ensure you understand how the supplier can assist with the migration of your data.

What can I expect during the migration?

Ensure you understand all of the steps and key milestones. Again, make sure this is clear for internal milestones, as well as those of your solution provider.

How will I be supported from start to finish?

Ensure it is very clear who is doing what on the project plan. Plus, ask if you’ll get project management support from the solution provider.

Key project activities, with associated milestones, should at minimum include:

  1. Discovery Phase
  2. Project Plan
  3. Identify Gaps
  4. Discuss solutions for the gaps
  5. Scope customisations
  6. Solution Delivery
  7. Data import
  8. Training
  9. Review (and adaptation if necessary)
How will migrating to this platform affect my procurement operations?

The migration itself should have minimal impact.  However, procurement operations would typically change to improve the overall process efficiencies. Taking the opportunity to build in process steps, as appropriate to your needs, and remove unnecessary steps or activities.

What open application program interfaces (API) are supported?

A platform with a robust, open API lets you easily integrate the tools you already use and support what you specifically need.

5User Interface / Experience

Selecting a solution that’s easy for everyone to use is critical. Often the user experience is overlooked in the selection process. With the emphasis being on ticking off functional requirements, as opposed to how easy it is to use the solution. A significant error when you consider user adoption of the investment you are making in time and money.

Systems that are difficult to use won’t be used. They will quickly become obsolete, people will revert back to old processes, and the organisation will have wasted considerable time and resources.

When evaluating a solution, it is essential to consider the user interface. These are the critical parameters that should be considered:

  • Clarity: How easy is it to understand what to do or what each menu item does? Is it unnecessarily complex and full of useless features? Are there clues that indicate what will occur by taking an action, so users don’t have to experiment or deduce the interaction?
  • Consistency: Are actions constant across all pages to bolster familiarity and eliminate errors? Does it deliver the expected, predictable results, with no surprises?
  • Efficiency: Does the system intuitively understand what actions a user is most likely to make, and is it quick to deliver on those actions? Does it enable users to perform an action with a minimum amount of effort (clicks and data entry) impacting in an obvious way on their productivity? Does it deliver the expected results the first time, so that users don’t have to repeat the action (perhaps with variations) to get what they want?
  • Engaging: Is the overall design aesthetically pleasing, or is it likely to turn off visitors and users? Can it be branded? Can users navigate throughout the menus without fear of penalty or unintended consequences, or of getting lost?
  • Future-proofed: Will the basic design hold up several years from now?
  • Free of distractions: Does it display only the menus and functions that each specific user needs, removing other menu structures? Is information accessed easily and displayed clearly, especially because users often have to make time-sensitive decisions based on the data shown?
  • Responsive: Does the User Interface give clear, immediate feedback to indicate that the action is happening, and indicates clearly either a successful or unsuccessful completion?
  • Forgiving: If a user makes a mistake, does either the right thing occur anyway or can they undo the action with ease or recover back to a previous step or version?
  • Free of frustration: how does the user feel after using the system or process? Emotionally are they satisfied with the interaction and results?

6Plan for Change

You cannot predict everything and there will need to be flexibility in your planning to allow for change. In any new system migration, it is good practice to plan for change. 

 

A planned data migration

Migrating platforms or automating manual processes can seem overwhelming in the Indirect domain: with the multitude of suppliers and products. But it can also be painless if you plan the data migration and focus on managing the process automation within your organisation. This cannot be left to the solution supplier to manage, as their scope of control is limited to their own resources and solution components.

Together with the solution provider you will need to consider:

  • Import/Migration of data
  • Access to data held in a central database or another eProcurement platform
  • Management of system access security and access rights
  • Data back up

Ask yourself

  • Do we have a clear understanding of how data is mapped from one platform to another?
  • Do we know who has what privileges in terms of spend authority?
  • How will the process change between our current way of operating and operating on the new system and what data needs to be transferred or added to support the new process?

The order in which you import data is crucial to most solutions and totally dependent on the way these solutions automate processes. So, the order of data migration will be specific to the platform you choose and, therefore, you will need to understand from your platform supplier what is the optimum order for data migration.

7Ongoing Support

It is important to work with your solution supplier to understand ongoing support requirements. These need to be scoped and included for a smooth transition.

Ensure you have allowed for resources to work with your platform’s experts after launch/go-live to keep your eProcurement solution on track from an operational perspective.

Also, ensure that you understand the support process associated with any solution issues: how do you raise tickets and how are these prioritised and managed by your solution provider. What are the SLAs?

Some additional resources to ask about include:

  • Online product education videos (remember indirect spend systems are used across the entire organisation and external formal training for all users would not be cost effective)
  • Training for Super Users
  • Online help menus, relevant to the screen view
  • Technical support to match business requirements

8Conclusion

This article covers some of the key issues on selecting an Indirect Spend platform. Providing an insight into the things that need to be considered.

To provide the maximum benefit, it is important to focus specifically on Indirect Spend solutions.

However, depending on the size and nature of your business, this may not be your only investment in automation. If you have a Strategic Procurement platform, in addition to your Indirect Spend Platform, then it may be important to integrate these two systems.

If you have found this article of interest then please reach out to Talk to Claritum on your Indirect Spend needs and migration plans

Case Studies

See example case studies 

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