Original article published on Linkedin by Charlene Danel, CPPO
Five Things Procurement Should Expect from ERP - Enterprise Resource Planning (ERP) systems are intended to provide the back office to support the entire organization, spanning finance, human resources, supply chain management and specialty functions. ERP is a standard expectation of medium to large organizations, and is often executed to bring consistency and transformation.
Many procurement organizations, however, often feel underserved by typical ERP implementations. The standard ERP focus on “system of record” financials lead to perceptions of inflexibility. Additionally, many of the most important innovations for modern procurement automation have not been fully incorporated into ERP (more on that below).
Fortunately, the leading ERP solution providers have all made significant strides over the past five years in their development of procurement automation functionality. Maximizing the value of the baseline ERP both sets the stage for future eprocurement investments, and allows the procurement officers to show they have maximized the capacity of current tools.
So, what are the five baseline things that Procurement Officers should expect from their ERP in support of their programs?
1. User Role/Permission Administration – ERP should have secure, single sign-on functionality with access and permissions within each module tied to distinct user roles.
2. Requisition Initiation/Workflow Approval – Allow for a common initiation point for end user requests, and establish baseline workflow for routing to the appropriate reviewer/approver.
3. Effective Spend Taxonomy – Category and item code set supported by the system should be at a sufficient level of detail to facilitate routing for commodity codes and to enable dynamic reporting capabilities.
4. Encumbrance/Budget Checking – Funds should be encumbered in real time and available budgets must reflect the official finance records.
5. Receiving - Order receiving functionality to enable invoice reconciliation and contract administration functions.
Typical priorities of Procurement Officers seeking procurement automation that may or may not be present in the baseline ERP include:
1. Self-service Online Marketplaces – The ability for master contracts to be created as catalogs in intuitive online purchasing portals
2. Open Access Solicitation Portals – Easy to navigate solicitation boards that give prospective vendors the ability to browse opportunities and respond electronically
3. Document Libraries for Solicitation Development – An ability to use modular solicitation templates to improve consistency and reduce re-work
4. Real Time Dashboards – Give procurement staff and leadership the ability to see spend management information and staff workloads
5. Contract Management Tools – Improve the capabilities to create contract files that track milestones and change events
Find more breakdown on these priorities on Dustin's fast talk - Building Blocks for Success in Procurement Automation.
