e-Procurement

Preface PART ONE: THE PRACTICAL GUIDE e-Procurement: an introduction *Buying is an essential function in every organization *Putting e-procurement into perspective *AMEX survey *Traditional location of the purchasing department *Systems that the purchasing function uses *The role of the buyer The traditional procurement life cycle *Traditional life cycle *A need is identified *Approve the requisition *Decide from where to source the need *Large new purchases may require a request for quotation *Create a purchase order *High value orders may need additional approval *Record goods receipt *Supplier submits invoice *Invoice matched to GRN and purchase order *Supplier payment generated and purchase order closed Model procurement systems *General *Suppliers *Catalogues *Requisitions *Request for quotations *Buyer queues *Purchase orders *Commitment accounting *Receiving and returns *Invoicing and payments *Workflow *Interfaces *Shortcomings Implementing an e-procurement system road map *General *Define a comprehensive procurement strategy *Develop procurement policies and procedures *Start with an in-house procurement system *Implement a procurement improvement programme *Identify an e-procurement pilot project *Implement the pilot project *Evaluate the lessons learned and benefits gained Benefits of professionally managed procurement *Overview *Eliminate maverick buying *Make use of purchasing muscle *Control budgets better *Track organization spend *Automate authorization of spend *Improve terms and conditions *Decrease administration costs *Reduce order cycle time *Eliminate duplicate payments *Self-billing Redefining the procurement strategy *General *Document spend by category of goods and services *Define procurement policies *Write procedures How e-buying differs from traditional buying *New e-procurement software that connects to the Internet *Availability of the procurement system *Communication with suppliers is changing *Requisitions are simplified *New methods of placing purchase orders *Recording receipt of goods and services *Payment methods are being transformed *How supplier relationships are being revolutionized *Security must become a high priority Benefits of e-procurement *Speed supplier communications *Instant access to up-to-date prices and supplier offers *Comparison shopping easier *24 x 7 access *Reduce paperwork *Supply chain management simplified *Reduce order costs *Shorten order cycle time *Greater access to procurement functions *Identifying new sources of supply *Comparing traditional and e-procurement processes *The MasterCard difference The biggest challenge suppliers face: e-catalogues *What are e-catalogues? *The content of e-catalogues is critical to e-business *Catalogues can be hosted in different locations *The challenges of building and maintaining catalogues *Benefits of e-catalogues to suppliers *e-catalogue characteristics Market sites *What is a market site? *Market site services *Characteristics of market sites *Market sites fall into different types Best practice procurement *Best practice produces best results *Limiting the number of active suppliers *Establish contract orders *Automated workflow of approvals *Eliminate non-matching invoices *Construct an internal item catalogue *Ensure compliance Keys to successful e-procurement implementations *Lessons learned *Get supplier buy in *Set up workable processes and procedures *Start with a prototype *Work with suppliers to build usable catalogues *Integrate the e-procurement system with back office and data warehouse systems *Transmission of electronic documents between organizations *eliminates administration overheads *Automate spend areas that are under control Conclusions Benefits too great to ignore The new world of e-procurement is here Must plan for it The solution must be flexible Look for quick wins Start now PART TWO: THE PROBLEM ISSUES Understanding the hype and negative claims The positive claims appearing in the media Media concern: not all e-procurement models succeed *The choices *The private exchange *The market sites or marketplaces *The big exchanges or marketplaces created so far Media concern: key players in trouble *Ariba *Commerce One Media concern: security is questionable Media concern: rethink procurement strategy Media concern: suppliers not playing ball Media concern: market sites stopped by authorities Media concern: e-procurement experience lacking Media concern: e-procurement is expensive to implement Media concern - B2B does not exist Glossary