Many CPOs are looking for ways to ensure good procurement practice across as much of their organisation’s purchasing as possible. Is eProcurement the way to achieve this?
Does decentralised procurement mean losing control?
Adopting a decentralised procurement model can be one way to achieve greater spend under management. There’s often an urge to restrict what people in the organisation have authority to do as a way to ensure compliance with procurement policies and practices. The upshot of this, though, is often to make the Procurement function a bottleneck. As a result people feel they’re delayed by the process and find ways to work around the restrictions.
A traditional view and experience of devolving authority to a departmental (or other) level is that budget holders and Procurement have a lesser ability to monitor spend. Some feel that decentralised procurement means less visibility or spend and, therefore, less ability to leverage budgets and make efficiencies.
Can technology deliver change?
It’s true that, without the right platform in place, decentralised procurement means a lack of visibility. However, the opportunity lies in using eProcurement to give all areas of the business access to the procurement process and implementing an appropriate level of good practice in how they undertake their purchasing.
It could be called a ‘carrot and stick’ approach. The ‘carrot’ is access to a self-service procurement system – whether it’s catalogue-based purchasing or tendering – that doesn’t unnecessarily slow them down. The ‘stick’ is that purchasing needs to be undertaken through the system, giving the organisation visibility of spend and an appropriate level of process, checks and balances.
How can eProcurement help?
eProcurement and eTendering aren’t new concepts or technologies. However, many legacy eProcurement systems are difficult to use (even for the procurement professionals) and require the organisation to change its processes to suit the technology. Additionally, they simply allow the uploading and downloading of documents – they aren’t based around flexible workflows and a data-centric model.
With these features in place, eProcurement and eTendering open up real value for flexible processes operating across disparate networks and teams. Decision-making and authorisation around purchasing can be devolved or centralised as makes sense to the organisation and there’s greater visibility of spend and efficiency, by supplier, department, even at a product level.
The goal of technology implementation should be to enable procurement to define good practice and to support procurement activity in their organisation. They shouldn’t be bogged down in running procurements, they should be using their skills and experience to help deliver better procurement. Decentralised procurement is essential to achieving that goal.
