The decision to introduce e-Procurement can be a catalyst for revisiting the whole purchasing process, to make it more efficient.

Whether you want to buy or sell through e-Procurement, it is essential to start by knowing exactly how your organisation operates. This helps you to identify how the processes could be improved. Bear in mind that your strategy has to work closely with that of related areas, such as finance and IT.

Current spending processes

For instance, a client thinking of moving towards e-Procurement might start by analysing the current spending processes in detail. This covers:

- the types of goods and services purchased
- their values
- how the spending is spread over the year
- how much is spent with different suppliers
- the number of invoices raised, split by supplier, type of procurement and purchaser.

Armed with this information, it should be possible to look afresh at the processes and see where changes could be made to improve efficiency.

Concentrate on picking appropriate technology to meet the overall business aims, rather than artificially introducing technology for its own sake.

Typical cost inclusions

For a supplier to set up an e-Procurement system, costs will typically include:

- additional hardware
- provision of fast, reliable access to the internet
- purchase or development of the software systems
- analysis and redesign of their internal processes
- staff training and support
- building the catalogue and maintaining the data. There may be a need for a variety of classifications and codes, to cater for different customers.

e-Procurement tools can be developed by in-house IT teams. But systems such as online catalogues and e-Auction packages are increasingly available from outside service providers. These companies can also host the software and data and make it available over the internet. They should then take responsibility for issues such as support and back up.

Supporting technologies

Other supporting technologies are becoming increasingly available, which will help drive the uptake. These include:

- faster internet access through broadband
- third generation mobile phones which will make it easier for people to access information while away from the office
- devices such as smart tags which can be attached to goods, passing information into the accounts system once they are delivered.

Measuring success

It is vital to measure the success of the project - decide on appropriate objective and subjective criteria. These might include:

- the number of orders processed
- the number of suppliers who have agreed to use the system
- speed of payment
- results from user surveys.

Tips

- Involve the primary stakeholders as early as possible, to be sure of their buy-in.
- Pay attention to communications, ensuring that the message gets out across the organisation.
- Not all e-Auction systems can handle factors other than price.
- IT alone is not enough. Buyers and suppliers all need to examine their business processes to look for ways of making the transactions more efficient.
- People will only make use of the system if it helps them to do their jobs. Part of this is ensuring that it is intuitive to use, and that training, help and guidance are readily available.
- You may need to discuss ways of restricting which products can be ordered.

The IT Construction Forum is a service of the government-funded Constructing Excellence initiative and is managed by Davis Langdon Management Consulting.