Procurement Information System: The Complete Guide for Successful Procurement Management

e procurement guide

The global procurement management market, also known as “e-procurement,” has seen significant acceleration following the COVID-19 pandemic. According to a study published by The Insight Partners, during the health crisis, many companies felt an urgent need to streamline their procurement processes and took steps to implement and deploy Procurement Information Systems (SI Achat). This situation has contributed to the growth of the global market, which is expected to reach a value of $4.74 billion by 2027, with an annual growth rate of 6.4%.

The pandemic has highlighted the importance of having a resilient and digitalized supply chain. Discover the steps to follow to benefit from all the advantages of deploying a Procurement Information System within your company.

Procurement Management and Procurement Information System: Objectives and Benefits

Objectives of an Efficient Procurement Information System (SI Achat)

A Procurement Information System (SI Achat) is a computer tool that collects all data related to procurement within a company in real-time. It processes information such as supplier details, order statuses, amounts, and inventory levels.

This data is analyzed by the software to highlight significant facts and events, enable improvements, and facilitate decision-making. As digital transformation becomes a new standard across all sectors, selecting a Procurement Information System is a key step in this process of rationalization and optimization.

The 5 Benefits of Procurement Management in a Company

Deploying a Procurement Information System (SI Achats) offers numerous benefits at various levels of the company:

  • More Efficient Organization: With an SI Achats, it’s possible to streamline the order processing procedure, eliminate inefficiencies associated with scattered procedures, and ensure consistent and structured management.
  • Improved Order Tracking: Procurement managers can monitor the progress of orders, identify potential delays, and take necessary actions quickly to optimize timelines and enhance internal satisfaction.
  • More Detailed Spend Analysis: The SI Achats makes it easier to categorize expenses and generate detailed reports, for example, by supplier or period, to identify opportunities for savings or negotiations.
  • Automated Processes: Utilizing advanced features such as automated workflows, electronic validations, and notifications, administrative tasks are reduced, freeing up time for higher-value activities.
  • Improved Communication and Collaboration: Features such as collaborative workspaces, commenting capabilities, and sharing tools improve communication and collaboration among various stakeholders.

These benefits collectively lead to a more agile, responsive, and economically efficient procurement process that can significantly impact the overall operational efficiency and cost-effectiveness of an organization.

Choosing the right Procurement Information System (e-Procurement) for your business

Evaluating specific procurement needs

Before selecting a solution, several steps need to be undertaken, starting with an analysis of functional needs. Identify and prioritize strategic points for your organization: supplier management, contract management, inventory, orders, etc. Involving various stakeholders from procurement managers to end-users and financial teams is crucial.

To complement and confirm the information gathered, it is advisable to analyze available purchasing data, such as purchasing reports, order histories, and spend analysis, to identify trends, patterns, and recurring issues.

Analyzing existing procurement processes and identifying obstacles

It’s also important to map out current procurement processes. Document each step from the initial request to the receipt of goods or services.

Evaluate any obstacles and inefficiencies. For instance, consider delays, the most frequent errors made by different teams, challenges faced, as well as regulatory and CSR constraints or supply tensions specific to your industry.

Lastly, do not hesitate to explore the root causes of identified obstacles by looking for factors such as poorly defined procedures, gaps in communication, or inconsistent practices.

Criteria for selecting a suitable Procurement Information System for your business

Choosing a Procurement Information System ultimately means choosing a supplier, thus requiring sourcing. Various criteria should be carefully considered:

There are many solutions on the market; some are more popular than others. However, the one that suits your business will be the one that meets your specific needs and aligns with your strategic objectives. Options might include:

  • A procurement management solution that supports automated purchasing processes (e-procurement) and centralizes all data. It generally includes analytics features (spend analysis) that facilitate effective decision-making.
  • An e-sourcing solution focused on Supplier Relationship Management (SRM) that provides real-time visibility into exchanges with suppliers, thus ensuring responsiveness and identifying significant signals like supply degradation or quality issues.
  • An e-Procurement solution that streamlines procurement processes and includes features such as electronic invoicing, supply chain management, and performance management.

Ensure the solution provides support and maintenance in line with the level of demand required by your business challenges. Evaluate their availability (e.g., during evenings or on weekends and public holidays if your business requires it) and response times.

Make sure your provider can support your development in the coming months and years. For example, if your company plans to expand internationally or into specific and/or regulated markets.

Finally, consider the pricing of the solution. Typically, these operate on a fixed subscription basis with variable costs added. Do not forget to include the resources mobilized internally, such as dedicating one or more technical team members for the setup period and deployment.

Deploying a Procurement Information System in your company: planning and implementation steps for an effective and successful Proof of Concept (POC)

Starting with a Proof Of Concept (POC)

For deployment, it is advisable to start with a Proof of Concept (POC) to test the software in your specific context.

  • Scope definition: Define the scope of the POC to allow your procurement teams to test the software using real but defined data sets. Limit the POC to a manageable scope in terms of volume, features, and participants.
  • Use case design: Design use cases that are representative of your procurement processes. The POC requires preparation to develop cases specific to your organization that cannot be replaced by standard cases.
  • Performance indicators: Establish Key Performance Indicators (KPIs) and share them with your Procurement Information System provider. These will help align on common and quantifiable objectives.
  • User involvement: Involve users from different departments in the evaluation phase. Their feedback and expectations should be integrated into the POC to facilitate the subsequent adoption of the solution by all users.

User training to maximize the efficiency of the procurement information system

Setting up an onboarding program for users is also essential. This program should include:

  • Targeted training sessions: Organize training sessions focused on the specific features and workflows of the Procurement Information System.
  • Detailed user guides: Prepare comprehensive user manuals that detail step-by-step procedures and troubleshooting tips.
  • Reactive technical support: Establish a responsive technical support system to address any issues users may encounter.

In addition to the initial training program, continuous training should be established. This could be conducted when new features are introduced and could also cover the importance of data security and sharing best practices in using the Procurement Information System.

By following these guidelines, you can ensure a smooth and effective implementation of a Procurement Information System in your organization, leading to improved procurement processes and increased organizational efficiency.

Optimization, monitoring, and best practices for procurement management with a Procurement Information System (e-Procurement)

Tracking performance and adjusting strategy for successful procurement Management

Regularly tracking performance and predefined KPIs will ensure the successful integration of your procurement processes. While the selection of these indicators is specific to each company, some are crucial:

  • Procurement Performance Index (PPI): This indicator measures the efficiency and overall performance of procurement processes within the company. It assesses the company’s ability to achieve savings, meet supply deadlines, optimize costs, and maximize the added value of purchases. Regular monitoring of the PPI allows for the identification of improvement areas and the adjustment of strategies accordingly.
  • Supplier churn rate: This key indicator evaluates the stability and satisfaction of supplier relationships. Monitoring this rate helps procurement managers identify reasons for supplier disengagement, take corrective actions, and implement effective retention strategies.
  • Supplier performance tracking: This involves assessing predefined criteria such as product/service quality, compliance with standards, delivery times, and internal customer satisfaction. By measuring and comparing data from each supplier, it is possible to identify key partners and resolve issues more quickly when they arise.

Best practices for effective collaboration with suppliers

To establish effective collaboration with suppliers, it is essential to implement best practices that foster strong and beneficial relationships. Here are some specific tips to achieve this:

  • Embrace the new digital paradigm: Avoid trying to replicate each old habit and process exactly. Communicate with teams and guide them in truly mastering the new tool and its features to fully exploit its potential.
  • Share performance indicators with suppliers: Use data as a basis for transparent and rigorous discussion. Do not hesitate to organize regular checkpoints to discuss necessary adjustments, share key information, and ensure alignment of your objectives. Using a Procurement Information System allows you to exchange information based on reliable and consolidated data.
  • Encourage suppliers to propose innovative ideas and share knowledge: This can be achieved through brainstorming sessions or closer collaborations. Promoting innovation helps improve procurement processes and find more efficient solutions.

By adhering to these best practices and effectively using a Procurement Information System, companies can enhance their procurement strategies, build stronger supplier relationships, and achieve greater efficiency and productivity in their procurement activities.

Implementing a Procurement Information System (SI Achat) today stands as one of the pillars of a successful digital transformation. It also serves as an effective way to optimize various procurement department processes, strengthen synergy and communication with suppliers, and achieve tangible, quantifiable, and significant results.

By leveraging the capabilities of an e-Procurement solution, companies can gain improved visibility over their supply chain, enhanced order management, and meticulous and precise spend analysis. This visibility not only streamlines procurement processes but also supports strategic decision-making by providing critical data that can lead to cost savings and more efficient supply chain operations.

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