Overview of the implementation process for an e-Procurement solution

Ramon Abbenhuis and Willem Blom, consultants at Supply Value, provide an overview of the steps required for implementing an e-Procurement solution, from the initiation of the e-Procurement project to acquisition, realisation, implementation and after care/evaluation.

PROJECT INITIATION
To start off with an e-Procurement project a business case should be developed with details regarding company strategy, the use of the e-Procurement system, available resources and timeline. Secondly it is advised to work project based by a project management methodology such as PRINCE2 Project management. In the Project initiation phase, a Project Initiation Document (PID) is composed. This document can be used to create boundaries to the project by describing the scope, goals, results, dependencies and assumptions.  Furthermore, the PID contains an extensive planning, risk assessment, governance and stakeholder overview (RACI). 

The last part of the initiation project is to get approval for the business case and Project Initiation Document to obtain the available resources (time, money, manpower) and start the work on the e-Procurement project.

ACQUISITION
After the project initiation it is time to start with the acquisition of the e-Procurement application. Firstly, it is important to gain insight into the purchasing strategy. Project managers need to know where their company is now and where they wish to go.  Also it is important to know the amount of transactions, the size of these transactions and the type of these transactions before choosing a system.

If all of this is known, a specification should be made regarding the problem statement, the goals and the boundaries set for the project. These three specifications can be used as a guide for choosing the right system. Supply Value advices their clients to apply Best Value Procurement (BVP)  as procurement methodology and process for acquiring the e-Procurement system since there are a lot of experts on the market and e-procurement is probably not the firm’s core business. 

Using the IT Value Sourcing framework , the functions of the e-Procurement system are not technically specified in detail, but are specified functionally in terms of goals that the e-Procurement system should satisfy. On the other hand, interfaces and security requirements are specified in detail. The problem statement, goals, specification and procurement process is described in a tender document which is distributed to e-Procurement suppliers (on the long-list). Supply Value has tender document – and presentation templates available which saves much time in this phase.

Subsequently an information session for suppliers is organised were the procurement process and needs of the organisation are presented to interested e-Procurement suppliers. Suppliers can answer questions which are answered during the sessions or later on paper. 

Based on the tender document and Q&A session, e-Procurement suppliers write and submit their tenders with. In the Best Value Procurement process this contains of performance, risk file and, value adding options (added with references in the private sector). The documents are graded by the project team and the suppliers, with the best tenders invited for a demonstration of their e-Procurement system and interview of key-employees in executing the project when the contract is awarded to this supplier.

Finally, the number one supplier is invited to write a detailed project plan for implementing their e-Procurement tool, risk assessment and final presentation. When this is all satisfies the project team, the contract for supply the e-Procurement software is signed with the number one supplier. It is important to keep in mind to make Service Level Agreements and re-transition plans before the realisation phase.

REALISATION
The realisation of the e-Procurement system by the suppliers contains of three phases. Firstly, a detailed design is formed by the e-Procurement suppliers with input of internal experts:

• Process: what is the procurement process of the organisation? Does this fully fit into the e-Procurement tool or are (minor) adjustments need to be made for an efficient and effective process?
• System: What steps are done in each IT-system in the network. How are the various IT systems (such as financial) integrated with each other?
• IT management: how is the e-Procurement system managed? Which tooling do they use?
• Security: which security measures should be taken to secure the application?
• Transition: what is the transition strategy when the contract with this e-Procurement supplier has ended at the end of the life-cycle or prematurely?

The second part in the realisation of the e-Procurement software, is the configuration of the tool. In this phase the e-Procurement tool is set up by the e-Procurement supplier based on the parameters formed in the previous phase: Realisation – detailed design. At the end of this stage the e-Procurement supplier delivers the e-Procurement system and interfaces with other systems, such as the financial system in cooperation with the IT department and suppliers of the integrated systems, such as the financial system. More over management processes, organisation and tools are delivered.

The third part in the realisation of the e-Procurement tool is testing the delivered e-Procurement tool. This consists of:

• Unit testing: Testing each part of the e-Procurement system separately to check for errors.
• System integration testing: After testing each separate part, the complete system should be tested while working together. If there are no errors, to the acceptance test can be started.
• Acceptance testing: Are the requirements and previously set specifications correct. Is everything working properly and can the users work with the system. There are multiple types of acceptance tests such as:
  • Functional acceptance test
  • Performance acceptance test
  • Security acceptance test
  • User acceptance test

IMPLEMENTATION
In the implementation phase the e-Procurement system that is delivered in the realisation phases is implemented into the organisation and its processes. An important part of the implementation phase is to inform everyone about the newly implemented system. Not only the employees of the company need to be informed about the system but also all other stakeholders such as suppliers and partners.

Secondly it is important to train the people who are going to use the system. Without properly training end users with the new system, the ROI of an e-Procurement system will be much lower than with a properly trainer team. Besides just training the e-Procurement users it is also important to create adequate support documents for processes in the e-Procurement system. Because every company uses different processes and rules it is important to create easy to understand documents. 

Finally, it is time to implement. As most companies already have some sort of data management system, or perhaps an older e-Procurement system, it is now time to convert the data to the new system. After everything is implemented it is time to end the implementation phase and to create the planning for the aftercare phase.

AFTER CARE
The final phase of an e-Procurement implementation project is the evaluation of the project. For now, an e-Procurement system is implemented and probably will be used for several years, but this, or other, systems may be replaced in a few years. It is therefore important to evaluate the project and to describe the lessons that were learned along with the success and fail factors. After the evaluation is done, it is finally time to finish the project and to formally stop the project.

Related: Insights and lessons learned from an E-Procurement implementation.