Implementation of an e-Procurement system: the business case
Central to the implementation process of an e-Procurement system is the business case. Ramon Abbenhuis & Willem Blom, consultants at Supply Value, on the key ins and outs of the business case phase.
A business case consists of two main parts, first there is the generic qualitative business case which consist of four parts which is followed by the quantified business case.
Qualitative business case
The qualitative business case is generic for all organizations. All organisations that use e-Procurement will work more efficiently and effectively, as well as bolster legitimacy and transparency in operations. Moreover, modern solutions are easier to use for end users.
The procurement process will become more efficient for users and suppliers due to the optimization, standardization and automation of tasks. Less employees are needed for the same amount of work. Besides this, more insights are gained in the procurement process which leads to better controllability of processes.
By standardizing the procurement process, it is easier to obtain management information. This information can be used to professionalize the procurement process and obtain better contracts. These smarter contracts lead to lower total costs and more value added.
The application of E-Procurement leads to better knowledge on the organizations' active contracts. By making it easier for employees to use these contracts they will be used more frequently. Procurement will therefore be conducted using more legitimate and beneficial conditions.
Empowering the people
By using e-Procurement, it will be easier for end-users to purchase contracts. Because of this, users will purchase less products and services outside of organization wide contracts. Key in the adoption of an e-Procurement solution is the ease of use for the end user. Using an e-Procurement system should be as easy as possible through one location: the e-Procurement system. When end-users start using this system, they will automatically start to procure in a more efficient way using the available contracts.
Furthermore, data will become available for procurement managers to improve future procurement processes and to make better fitting contracts with their suppliers. All-in-all this leads to a positive reinforcement circle.
Quantitative business case
The quantitative business case is dependent on the current situation in the organization. Based on the number of users, departments, locations, suppliers, orders, invoices, deliveries, SKUs, product characteristics, spending, and the time spent in the business process can be established.
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This article appeared earlier in online magazine consultancy.uk