In our series to date, we reviewed the primary modules of S2P (Part I and Part II), argued and counter-argued the merits of sourcing and procurement to clarify why e-Procurement must come first (Part III), and then dispelled some of the better counter-arguments we received (Part IV) as to why another module (specifically, Spend Analytics, Supplier [Relationship] Management, or Contract [Lifecycle] Management) should be first, when in fact, it should always be e-Procurement until a baseline is up and running (at which point the organization can begin implementing/using the next module).
Today, we’re going to outline baseline capabilities you should be looking for in an e-Procurement system, as well as explaining why you need them. This is not meant to be a complete list of capabilities you will need (over time), as every organizations’ needs are different, but a starting list that few organizations can do without.
- e-Request: any user who does not have access to the system should have the ability to create Procurement requests for Procurement to act on; otherwise, they will attempt to bypass the process and the spend won’t be captured in the system
- Requisitions: users who have the authority to place orders against contracts or budgets should be able to create a requisition for Procurement to review and flip to the appropriate supplier(s)
- Purchase Order: the system should generate purchase orders in modern e-Doc standards that are automatically delivered to a supplier in their preferred format (to their preferred system)
- Catalog support: it doesn’t need to have dozens of catalogs integrated out of the box, but the ability for Procurement to integrate the catalogs it needs as well as build in-house catalogs that represent contractual agreements for goods and services that can be selected by users who have system access (the complexity required will be dependent on the organization and whether it’s just standard CPG or direct parts or packaged services or consulting services with rate cards, etc.)
- Quick-Quote/Quick-Bid/Request-for-Bid: when the organization needs to spot buy something and needs to get multiple quotes to do so (not a full modern, Strategic Sourcing, RFX solution, but simple functionality for bid collection)
- PO ACK(nowledgement), A(dvance)S(hipping)N(otification), and standard e-Doc support
- PO-FLIP: to make it easy for suppliers to create invoices
- e-Invoice Support: accept the invoices
- Goods/Service Receipt/ACK: extensive inventory support not required
- m-way Match: the PO should match the invoice should match the receipt at the minimum (and the PO should match the contract, which it will if the catalog was populated with all the goods/services at contracted rates and the PO built off of the catalog)
- Approvals and OK-to-Pay: support for (multi-level) (parallel) approvals and ok to pay
- Complete API for Data Import/Export: catalogs need to get in, ok-to-pay, good receipt notifications, etc. need to be pushed out
- DIY Organizational Administration: that allows them to define org structure, roles, user, access, catalogs, approval chains, and other core capabilities
This is just a core starting list of capabilities, the average organization will need a bit more, and the goal should be to get a system that will allow the organization, and its users, to grow over time, but anything less than this would likely not provide a baseline.
For a deeper dive into what you should be looking for from a user experience perspective, if you have Spend Matters Pro access, check out this classic series the doctor co-authored with Xavier “The Revolutionary” Olivera:
- The Procure-to-Pay User Experience Part I
- The Procure-to-Pay User Experience Part II
- The Procure-to-Pay User Experience Part III
- The Procure-to-Pay User Experience Part IV
And for those of you who want an advanced “AI” solution, check out this series which is relevant and realistic:
- AI in Procurement Today Part I: Definitions and 6 Applications in P2P
- AI in Procurement Today Part II: 6 Applications in P2P
- AI in Procurement Tomorrow Part I: Recap and Overspend Prevention Examples
- AI in Procurement Tomorrow Part II: “Ninjabots” and Augmented Intelligence
- AI in Procurement Tomorrow Part III: Category Wizards Will Save Time, Add Strategic Muscle
- AI in Procurement: The Day After Tomorrow
On to Part VI!