E-Procurement doesn’t need to be complicated
Does your business have a strategy to integrate directly with your partners’ ERP systems? If not, you need one. Whether you are a buyer, supplier or both, the ability to connect to key partners at the click of a mouse is vital to success in an age driven by automation.
The drivers behind a good integration strategy are simple; increase efficiency and cost savings. As a reference point, Aberdeen group state the cost saving between processing a manual invoice and an automated one is $10.73. How many manual invoices does your business process annually?
When developing your strategy, simplicity is key. Target the area where you can have the biggest impact. Which clients/suppliers do you transact the highest volume of purchase orders and invoices with? Try to come up with a solution that will cater for the majority of these documents. If you are a supplier though, be aware that you will need to have multiple routes for clients to trade with you. If you are a buyer, your life is a little easier. Suppliers will want your business, so you can dictate (within reason) how that electronic relationship looks.
The good news is that there are plenty of options out there, ranging from fully automated cloud network solutions like SAP Ariba and Coupa to the self-hosted ERP plug-ins available in MS Dynamics AX and Oracle Business Suite. Just remember when choosing your solution, standardisation is key. The more customisation you add, the harder it is for your key partners to match the additional requirements you have built. You will also need to accept that not all partners will be able to integrate with the solution you choose. This is where other tools such as Optical Character Recognition can help. Taking standard documents such as PDFs and converting them into XML can still automate the purchase order to invoice process.
When embarking on a new integration project, try to make it as painless as possible for your colleagues and partners. There is sometimes a theme in E-Procurement whereby buyers prefer to receive static catalogues, but suppliers would rather provide punchouts. Steer clear of this trap. Encourage open and honest communication from day one. As a buyer, make sure you know exactly what you want to achieve and that this is clearly communicated. There is no such thing as over-sharing here! Also, be clear about your requirements. Consider what customisation you require and which country and industry specific issues you need to address. If at all possible, stick to these requirements, as any changes could result in the project being delayed. As a supplier, be flexible where you can, but be up front about your limitations. You are far more likely to have a successful relationship with clients if you engage with them effectively and are transparent about your capabilities from day one. It’s also key to keep these communication channels open throughout the project. Set a regular cadence to discuss progress and any issues you are facing and work together on a project plan. This needs to be far more detailed than just a go live date. It should include what work needs to take place and by when, as well testing dates and owners for each item. Buyers and suppliers are much more likely to tolerate a delay if it is communicated early.
Involving the correct people within your business depending on the type of project you are undertaking is also critical to success. For example, a supplier loading a static catalogue of items for a buyer will probably require input from your E-Commerce, Product Management, IT and EDI (if you are lucky enough to have one) teams. If you are embarking on an E-Invoicing project, it’s a pretty safe bet that you can swap out Product Management for Finance or Accounts Payable or Receivable. Make sure that you engage the correct departments early and understand their availability, so that you don’t impact the timeframe.
Whether you work in procurement or sales, the fundamentals when developing an integration strategy remain the same. Sticking to these basic principles will allow you the time to focus on the details.
· Keep it simple
· Target the volume
· Set regular check-ins
· Engage the right people