Choosing the correct procurement system is one of the key strategic decisions any organisation that is aspiring to enhance its procurement operations needs to undertake. It is designed to deliver a flexible solution that can be easily integrated with current systems to provide best requisitioning, budgetary controls, supplier records and much more. The emerging solution should help decrease maverick spend, support automation of processes, give an insight into spending and foster cooperation of spending parties. The 5 must read tips outlined in this article provide businesses with guidelines for assessing and implementing the procurement system that is most appropriate for their organizations.
- Standardize Key Requirements
To obtain an appropriate system, the first step is to determine the specific needs of your organization. Seek feedback from all the relevant departments of finance, accounts payable, procurement, inventory and IT and other related departments so as to get the idea of the expected features.
Determine which of the options can be of benefit in the context of sourcing, buys, invoices, or payments. Assume the number of transactions, data to be exchanged and queries to be handled for scalability considerations. Usually, there could be some specific operations, which are major for your business, for instance, direct or indirect material purchase, services acquisition, or contract management.
Existing process documentation, problem areas, and goals for enhancement are the best way to home in on modules and technologies most suited to current and future visions. This exercise solidifies the key business requirements that the selected solution has to meet using features available out of the box or through extensions.
- Evaluate Functionality and Compare Solutions
It is pertinent to make a comparison of functionality of the leading options.
Namely, with the primary criteria outlined, it is possible to compare the functionality of existing market solutions with your needs to a great extent. Popular systems offered constant updates, thus, paying attention to the most current offerings.
Evaluate the basic and advanced components concerning requisitions, budget constraint, sourcing, contracts, billing, analysis among others. To do so, one has to compare displayed capabilities in the sphere of process workflow & reporting, interface design, integration, security, collaboration, and mobility. The options made on the newer technologies also allow for easier customizations that suit your needs most of the time.
Select tools that are capable of solving a significant percentage of current requirements without any customization, which are costly with high risk. Choose Open APIs and cloud-based platforms that provide various means to interconnect with your IT environments and business applications.
- Verify Technology Credentials
Invest time and effort for discovering the base framework and technical merits of the shortlisted choices. Sometimes solutions based on the usage of the advanced frameworks, in-memory computing, analytics engines and cloud platforms provide faster, scalable and more secure implementation.
Assessing the credibility of vendors through their development capability, proved implementation strategies, training modules, and support structure to facilitate hassle-free deployments. Choose vendors that are listed in MEGA or Gartner directories – this will minimize risks stemming from inexperience in your sector and / or location.
In any case, scale and customize pilots to check if value proposition and promised capabilities align with the realities of business before going fully operational. Another approach under practicality is testing by business users as a cautious approach to readiness testing.
- Compare Implementation Models
Both the strategies for implementation and their costs differ significantly depending on the choice of option and vendor. On-premise has high initial costs but they have full control over servers, security and customization and data as well. SaaS-based tools require considerable outside IT support, but payment occurs based on their usage at regular time intervals.
Experts can focus on specific necessary adjustments, maintenance and management through the help of managed services. Deployment timeframes range from a few weeks for generic cloud applications to over one year for complex installations. After computing all the estimates, one can conclude which model is more appropriate in view of the budgets and constraints present.
It’s important to compare implementation models while keeping the long-term effects of each strategy in mind. Even though they give you more control, on-premise solutions frequently need a large upfront investment for IT infrastructure, software licenses, and hardware. Organizations with stringent data security requirements or those in highly regulated sectors where data sovereignty is an issue may find this model especially appropriate.
- Consider Long-Term Costs
Nevertheless, getting a license form only one significant expense, further costs add up from customization, hardware, maintenance, training and upgrade costs in the long run. While priced higher, many platforms have difficulty in proving ROI and tend to require high change management costs.
The ultimate TCO should be evaluated before and after the implementation of a technology and its features, so that all direct and indirect costs can be considered. Explain the costs that may be incurred in the integration of the specific IT system with the current system architecture. As another cost factor, prepare for training staff and users in the new digital methods to be implemented. It goes without saying that complex tools are effective in meeting certain highly specific needs, but simple solutions do a perfectly good job for the majority of the same needs for much less money.
It’s important to look past the initial purchase price when evaluating long-term costs and investigate hidden costs that can have a big impact on the total cost of ownership (TCO) over time. The cost of system downtime during implementation and upgrades is one factor that is frequently disregarded. This may result in decreased output and possible revenue losses, which the total cost analysis should account for.
Conclusion
Identifying the most suitable request for quote software requires a comparison of procurement needs and wants of an organization with the procurement technology’s functions, the vendor’s competency, the mode of implementation, and the total cost of the technology across various options. Instead of being drawn to applications that provide superfluous features or complex capabilities, consider what serves necessary purposes effectively at the lowest TCO to achieve the highest return on investment.
