- Why should you have an operational procurement system?
- How can you reduce administrative purchasing work and decrease human errors?
- How do you secure that your purchasing policies are followed?
- How do you secure contract compliance?
- How do you secure that the purchasing volumes will be driven towards the preferred suppliers?

Operational Procurement System
Very often companies negotiate agreements with their suppliers and estimates good savings based on the new agreements. But the savings will never be shown on the P/L statement if the organizations are not using the negotiated agreements, and instead the organization continue to purchase as before and the saving potential will not be fully exploited.

Especially in purchasing of indirect material, the number of suppliers are high and the purchasing needs are very complex and therefore a big challenge to drive volumes towards the preferred suppliers. In large organizations with a large number of internal buyers/requesters, often outspread within the organization, and without any supporting procurement system the purchasing process compliance will be a big challenge. Today’s procurement systems can offer many functions that could increase both efficiency and compliance like e.g. possibilities to create good structures, integration of supplier catalogues, internal articles/catalogues, integration with ERP systems, statistics and reporting and approval processes etc.

Furthermore, the number of wild invoices risk to increase if there is no process to follow.

A procurement system has many benefits:

1. Reduce administrative work by automatically match invoices and purchase orders

2. Forcing the organization to buy via system in order to comply to negotiated agreements

3. Forcing the organization to buy via a system in order to comply to different purchasing policies

When buying material and services through a procurement system, you will make sure that you buy from suppliers that are uploaded in the system and you can also set rules so different purchase policies are followed. This way you will decrease the number of wild invoices as well as decrease your cost.

Some companies say “No Purchase Order – No Pay” meaning if you don’t place a purchase order to your supplier through the system, the supplier will not get paid. Our experience is that you need systems, processes and change communication to reach your objectives. A company can always tell people what to do buy rolling out rules, systems and processes. But it is very difficult, close to impossible, to reach full compliance if the organization doesn’t understand the value and “what is in it for me”. Therefore, change communication tools and methods are equally important as implementing a new procurement system.

Common pitfalls

- Companies invest in and implement a procurement system and forget about the change communication perspective. This will mean waste of investment and continuous problems with low compliance.

- The chosen procurement system is not user friendly and difficult to use. This will result in that the organization will not use the system since it is easier to Google and buy from webb shops or call a local supplier

- Companies only implement commodities that can be in catalogs. Often professional services are forgotten in procurement systems but they are equally important to be included in order to achieve compliance