Exploring the Not for Profit procurement differences

Contents

1Introduction

We have come a long way since Aldus Manutius of Venice published the very first catalogue in 1498: a catalogue of the books that he was printing. “One of the strengths of the Aldine press was the extreme care with which the aesthetics and accuracy of printing were dealt with, down to the smallest detail. Aldus, for instance, employed one of the most outstandingly talented punch-cutters of his day.”1

To create our catalogues today the outstanding skill of a punch cutter is replaced by that of the software engineer. Who now provides the online catalogues we use to purchase goods and services.

This article looks at the use of business to business online catalogues to mitigate the people factor of any procurement process. As it is people that govern the success or failure of any procurement automation.

2Effective procurement and how people can influence success

One of the greatest barriers to effective procurement automation is people.

Let me explain that statement. Within your organisation there could be any number of people from 10’s through to 1000’s. They will all have different needs and requirements to be able to carry out their daily function. They may be able to consolidate these needs within a group or they may have a very specific individual need for a product or service.

If your systems and procedures help these people or groups to do their job more efficiently and effectively, then these people are on your side and there is no barrier. However, if your systems and procedures do not, then you have a barrier within your organisation to these systems and procedures delivering results.

How can you remove these barriers to effective procurement and help people within your organisation to buy what they need?

One of the most effective ways is to provide a catalogue-based portal for them to make their purchases. An interface that makes it as simple as point, click and buy for the user.

 
Yes, I hear you say, that is great but…

What about those requirements that are not off the shelf? Or users who have different sets of common products they want to purchase? How does the catalogue approach help there?

The catalogue portal, with integrated RFx capabilities, helps significantly. Here you can specify variations to an off the shelf product or service. Or define a totally new requirement. Saving these for future purchase requirements if that makes sense to do.

Users are able to use a structured closed bid RFx (RFQ/RFP) process, with support for multi-part projects sourced from single or multiple suppliers to component level. Employees can compare whether to single source an entire project or buy components from specialist vendors and variances can be quickly and easily created to assess ‘what-ifs’ scenario planning.

Plus, if there are common products to specific users or perhaps regional variations. Then you can create different catalogues views for different user groups.

This mitigates one of the most common reasons for the failure of a procurement automation system: trying to create a single process that works for everyone. Trying to force users to use the same process and page views, rather than tailoring their interface to their needs through a user group specific Catalogue approach.

3What can Procurement do with Catalogues?

Catalogues enable Procurement to capture individual employee orders, without getting involved in the transaction detail. Aggregating demand for stocked products, configured kits, made-to-order and customised products and services.

This relieves Procurement from day to day transaction activity, since employees rapidly adopt the familiar online shopping experience of a catalogue-based system.

Procurement can use catalogues to promote products and services or specific suppliers to individual users. Reducing errors and maverick purchasing or focusing attention towards specific suppliers (perhaps for ethical, environmental or local supply reasons.)

Catalogue Managers can brand and configure catalogues and publish selected products and services to highly profiled individual users, locations, brands or territories resulting in greater adoption and fewer errors.

Catalogues can also be used to improve margins. By capturing orders and aggregating demand across multiple users, multiple sites, multiple customers and even multiple countries.

Suppliers can be set up to receive specific types of RFx’s and respond directly to these through the portal. Plus, each element of a specification can be captured to allow granular analysis for spend control.

Online Catalogues offer many advantages

  • Supplier conformance to pre-negotiated commercial conditions, including pricing.
  • Improved reliability when updating.
  • Relevance of products to users.
  • Elimination of time spent inputting data and time spent on repeat orders.
  • Reduction in costs relating to input errors.
  • Time-saving with respect to supplier data exchanges.
  • Efficiency of the ordering procedures.
  • Efficiencies associated with supplier management.
  • Elimination of paper.
  • Rapid approval processes.
  • More effective monitoring of the purchasing process.

4Some process timings for overall e-procurement2

Process Step

Manual/EDI (Minutes)

eProcurement (Minutes)

Product Selection

20

3

Availability/Price Check

10

1

Requisition Creation

11

2

Requisition Approval

21

3

PO Generation

11

0

PO Approval

3

0

Send PO to Vendor

14

0

PO Confirmation

4

0

Status Check

11

1

Receive Shipment

12

2

Match Invoice, Receipt, etc

8

5

Process Exceptions

8

3

Payment Approval

4

3

Payment Generation

8

5

Process Returns

5

3

“The average procurement professional spends 58% of their time on non-strategic work.” Spend Matters

5Summary

Use of catalogues for the most frequently purchased items impacts significantly on user productivity and Procurement’s involvement in transaction processing. Employees able to create their own purchase orders drawn from these catalogues. Plus, of course, users are very familiar with the concept of online catalogues, from personal experience, so the catalogue approach tends to be adopted more readily throughout an organisation.

Catalogues can also be dynamic; in that they present only the items that the user needs to see – those items they regularly purchase. Plus, they allow re-ordering of the same items without having to generate a new order form.

Catalogues engage with users, specific to their needs and requirements, yet at the same time they ensure compliance to procurement policies of an organisation.

It is though important that catalogues are supplemented with RFx functionality to allow users to make those non-standard purchases.

How easy would it be to create your own branded catalogue and automate procurement for your entire organisation? Find out

Contact Claritum Today

Major brands are already using Claritum’s catalogue functionality to purchase print and marketing goods and services. Including Pfizer, Easyjet, Canon and Nestle.

See Claritum customer case studies

Or take a look at what Claritum’s solution can do

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