Free Research Paper — Should Mid-Market Firms Invest in eProcurement Systems?

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We have produced several research papers during the course of the past few months, some you may have missed owing to the holiday season. If that is the case, here is a quick reminder of what has recently been published that we believe will be of interest to you – all free to download on registration. The papers are written on a range of topical procurement industry challenges by our resident expert, Peter Smith, and include trends, analysis and advice. They are sponsored by firms that specialise in that particular field and often involve findings from interviews with senior procurement people in that area.

Should Mid-Market Organisations Invest in eProcurement Systems? – The Key Questions Answered

The adoption of P2P technology has been in the main focused on larger users, both private sector and large public sector bodies. Most organisations in what we might call the mid-tier from a size perspective (defned here as frms with a turnover of around £200 million to £1 billion a year, or their public sector equivalents) still work on manual systems, home-made or locally developed solutions and systems of some type. Others may have ERP systems but with limited purchase-to-pay functionality, or they may simply not use the available functionality, perhaps because it is perceived as overly complex or bureaucratic for their users.

Recent developments have made fully featured purchase-to-pay technology solutions a realistic option for this size of organisation. So, in this paper, sponsored by Coupa, leading provider of cloud-based fnancial applications, we answer typical questions that the Chief Executive, Chief Finance Offcer or Procurement Head of such an organisation might ask with regard to their P2P technology options.

So this paper is presented as a series of questions drawn from discussions with firms that are considering this sort of investment, and includes our own experience of the technology and as procurement practitioners.

Here is a taste from just one of the questions (and answers):

What will we get out of the system?

Let’s talk about three big areas - control, savings and value for money. In terms of control, it all depends on from where you are starting. Some organisations have good spend controls in place already, even with just manual processes. However, in general, it is harder to know who is spending what, with which suppliers, when you are relying on orders being placed verbally, or by email.

Keeping track of that, and making sure the right people authorise expenditure, is not easy in such situations. If you are relying on a manual or even home-made purchasing system, it is also intrinsically more diffcult to keep track of budgets and monitor spend against budgets, and feed the right spend data into the management accounts, compared to a systemised approach. In addition, commitment accounting is very diffcult to do with any accuracy under a manual buying system in our experience. And, although it is a sensitive subject, fraud is much easier when systems aren’t robust and well organised.

The process is key, so it is not just a matter of technology, and it is easier to implement the process when it is automated and systemised. Just a simple example in terms of fraud: it is easier to forge a signature on an order or invoice than it is to get access to a designated computer, get hold of the password of the authorised approver and sign-off an order or invoice on-line. Fraud can also come from external sources. Fake suppliers submitting invoices are not unusual, but again, good systems can protect organisations against that type of scam.

You can read the full report here.

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