Daily Archives: July 9, 2010

Forget the Champagne – The Real Gift is the Visionary White Paper

In conjunction with the IFPSM (International Federation of Purchasing & Supply Management), BravoSolution just released a brief 18-question survey determined to deduce the current state of sourcing and procurement initiatives globally. If you take just a few minutes of your time to fill out the survey and define the priorities driving your organization’s initiatives, the level of integration that currently exists between your organization’s procurement/sourcing and ERP systems, the applications you currently use, the services you currently use, the benefits you have seen, and the level of value you expect to see, you get entered into a draw to win a free bottle of champagne.

And if you are also willing to fill out an 8-box registration form, you can get exclusive access to the new Sourcing Innovation white-paper on The Future of Optimization!

Even if you are a visionary early adopter who is leading the way in the use of decision optimization who thinks she has a firm handle on where optimization is going, I guarantee you’ll learn a lot from this paper. Even though decision optimization in strategic sourcing has been around for ten years, which would make it a mature technology, in many ways it is still in its infancy. Most solutions barely meet the four pillars that define the basic requirements. Despite the increasing number of players who have started using the term “optimization” in recent years, the doctor still only recognizes six providers as having true strategic sourcing decision optimization solutions. Furthermore, the average solution doesn’t handle complex Bills of Materials, multi-variate trade-off objectives, or true make-vs-buy analysis, which would now seem to be a basic requirement for complex (outsourced) manufacturing. But even this is just the tip of the opportunities iceberg.

So take the survey, fill out the form, get your copy of The Future Optimization, and be the first to get some groundbreaking insight on eight directions that strategic sourcing decision optimization is likely to take in the decade ahead!

Another Reason to Use Plain English in Your Contracts

In addition to the fact that you will have an entire state on your side, as Dick Locke points out, and the fact that not using plain english can land you in some dire consequences, as Tim Cummins points out over on Commitment Matters, there is the fact that obscure language increases the risk of failure. If no one understands what they are meant to be doing, a dispute is more likely. Contracts need to be clear, so write them in plain English.

A Hitchhiker’s Guide to e-Procurement: An Introduction

Mostly Harmless, Part I

e-Procurement, while commonly used, is often misunderstood and confused with e-Purchasing, EIPP (Electronic Invoice Presentation and Payment), P2P (Procure-to-Pay), and even e-Sourcing. Thus, this brief guide will define what e-Procurement is, isn’t, and how it relates, or fails to relate, to e-Purchasing, EIPP, P2P, and e-Sourcing.

This guide will start with a definition of e-Procurement and then go on to cover the basic cycle. Along the way, it will discuss some benefits, challenges, and best practices while differentiating between the procurement of goods and services in the public and private sector when required. Finally, it will end with some advice on how to accurately cost a solution and determine the potential value such a solution offers.

Simply put, as per the e-Procurement Primer, eProcurement is the counterpart to eSourcing, starting where eSourcing ends and ending where eSourcing begins. It is the “e” implementation of the procurement cycle which is concerned with the requisitioning, receiving, and reconciliation of the received goods and services as opposed to the analysis, auction, and award that takes place in the (e-)sourcing cycle. It is essentially the automation of the non-strategic and transactional activities that consume the majority of a buyer’s time (that should be spent on more strategic value-generating activities), but one that comes with increased enterprise level visibility of all purchases.

The e-Procurement cycle, which can consist of up to nine steps (as defined in the doctor wants to remind you it’s sourcing and procurement), starts where there sourcing cycle ends and ends where the sourcing cycle begins. At a bare minimum, it will generally consist of an order, an invoice, and a payment. However, the process can also include authorization, goods receipt generation, reconciliation, tax reclamation, and analysis. Depending on the purchase in question, the (e-)Procurement cycle will generally contain three or more of the following nine steps:

  1. Requisition (& SOW)
  2. Approval
  3. Purchase Order
  4. Goods Receipt
  5. Invoice
  6. Reconciliation
  7. Payment
  8. Tax Reclamation
  9. Analysis

In addition, the e-Procurement process may also involve some regular catalog or contract management to keep catalogs and pricing schedules up to date between sourcing cycles.

The next set of posts in this series will explore each stage of the procurement cycle and the requirements that are placed upon any solution that claims to be e-Procurement.

Next Post: Requisitions, Part I

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