Implementation of an e-Procurement system: the business case

Central in the implementation process of an e-Procurement system is the business case. Ramon Abbenhuis & Willem Blom, consultants at Supply Value, shed light on the key ins and outs of the business case phase. 

A business case consists of two main parts, first there is the generic qualitative business case which consist of four parts which is followed by the quantified business case. 

QUALITATIVE BUSINESS CASE
The qualitative business case is generic for all organisations. All organisations that use e-Procurement will work more efficiently and practical & professional, as well as bolster legitimacy and transparency in operations. Moreover, modern solutions are typically easier to use for end users. 

Reducing cost
The procurement process will become more efficient for users and suppliers due to the optimisation, standardisation and automation of tasks. Less employees are needed for the same amount of work. Besides this, more insights are gained in the procurement process which leads to better controllability of processes. 

Creating value
By standardising the procurement process, it becomes easier to obtain management information. This information can then be used to professionalise the procurement process and obtain better contracts. These smarter contracts lead to lower total costs and more value added.

Mitigating risk
The application of E-Procurement leads to better knowledge on the organisations’ active contracts. By making it easier for employees to use these contracts they will be used more frequently. Procurement will therefore be conducted using more legitimate and beneficial conditions.

Empowering the people
By using e-Procurement, it will become easier for end-users to purchase with previously set contract terms. Because of this, users will purchase less products and services outside of organisation wide contracts. Key in the adoption of an e-Procurement solution is the ease of use for the end user. Using an e-Procurement system should be made as easy as possible by leading all processes through one location: the e-Procurement system. When end-users start using this system, they will “automatically” start to procure in a more efficient way using the available contracts.

Furthermore, data will become available for procurement managers to improve future procurement processes and to create better fitting contracts with their suppliers. All-in-all this leads to a positive reinforcement circle.

QUANTITATIVE BUSINESS CASE
The quantitative business case is dependent on the current situation in the organisation. Based on the number of users, departments, locations, suppliers, orders, invoices, deliveries, SKU’s, product characteristics, spending, and the time spend in the current process a business case can be established.