iPOS - Procurement Solutions for Infor FMS SunSystems
8 Key “People” Questions to ask at the start of a Procurement Project
1. Who is the Project Sponsor?
If the Project Sponsor is not a senior manager from within the business (not Finance or IT) then consider stopping now. If the impending change is not driven by the business then the success will be limited.
2. What proportion of the Project Board is from the Business (not Finance or IT)?
Don't stack the project board with team members from the company administration divisions. The team must be predominantly from business operations. These are the people that understand the business and can identify, agree on and commit to implementing operational change.
3. What is your justification for this project?
Keep away from making the justification financial returns – it is only human nature to convert that into “reduced headcount in my department” and the knock-on effect of that is obstruction, concern and lack of holistic commitment. Significant justification can be built around good corporate governance, data integrity, improved systems of internal control and maximising purchases from approved suppliers. All these are genuine legitimate business improvement objectives that come without the connotations of bottom line savings.
4. What are the quantifiable benefits for this project?
A critical element of project planning is to define and quantify the benefits that will result from this project. For the success of the project to be measured and celebrated you may need to know what the current metrics are, what the targets are, what the value to the company will be of achieving the targets and the measurements required to track the outcomes. Without these published goals in place the project will become at best defocused, and at worst destructive.
5. Are you prepared to physically and culturally change the way you do things?
If you are not prepared to change the way the company operates then you will systemise the existing processes with all the inherent inefficiencies and achieve nothing beneficial. How are you going to prepare for and execute the change management that will be required?
6. Who will the final implementation plan be presented to and what will it contain?
Any project of this significance in an organisation will require a documented strategy and implementation approach. Who is the final target audience for this proposal and what will the expect/need to see? How will the proposal be used within the company – is it the foundation on which a decision is to be made or in support of an existing directive? Is the project to be linked to an existing business case or is it to build the business case? Is the proposal to be supported by a return on investment and if so does the information exist to calculate that ROI or does the proposal need to define that as well?
7. On a scale of audacity from 1 to 10 how would you rate this project?
Aiming high for a massive business improvement with the resulting significant benefits will bring the project into the spotlight of the Board and the senior management team. That is usually what you want; this focus will bring ownership and commitment from the top along with the associated pressure to deliver on the goals.
However aiming low has it's advantages as well, it can lower management's expectations of the potential impact of the project and keep it under the radar to avoid obstructive and politically motivated interference.
You may need to think this one through.
8. What will cause this project to fail?
Identify the major threats to the success of the project, at the start and on an ongoing basis. Be agile in spotting them, mitigating against them and avoiding them. Define your critical success factors, monitor and pursue them. Plan to succeed.
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5 Key “Process” Questions to ask at the start of a Procurement Project
1. What process based KPIs do you wish to define and track on an ongoing basis?
What are the key operational factors that will achieve your quantified benefits? These metrics must be tangible within the process, practical to measure and realistic to target. Are there some company or industry benchmarks available that can be used for comparison?
2. What can we measure in the current process?
For comparison purposes it is necessary to have some measurable KPIs from within the existing process. These metrics will ideally be meaningful to the business and relatively easy to access.
Spend sufficient time clarifying and documenting your approvals matrix. This is imperative to the successful operation of any purchasing procedure. Search for the exceptions and normalise them, everything must be brought under approval control. Data integrity is a modern business imperative and is most likely one of your key project justification factors.
4. Who is allowed to directly engage with external suppliers?
This may seem trivial, however clearly defining roles and responsibilities around supplier management will improve both your own systems and those of your suppliers, leading to price control and reduced transaction costs.
5. When the new processes are defined and implemented how are you going to identify and respond to exceptions and breaches?
In the first pass of the implementation project it is highly unlikely that you will achieve a best practice result in everything you do. There will be compromises that lead to process exceptions. There will also be occasions when the new processes are either deliberately or innocently breached. How are you going to track those exceptions and breaches and what processes are you going to implement to define your responses to these occasions.
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6 Key “Product” Questions to ask at the start of a Procurement Project
1.Is the product seamlessly integrated into the back office financial system?
Poor or non-existent integration to the back office financial system is the single biggest reason why procurement projects fail to deliver anywhere near the desired benefits. There has to be a “single source of truth” in the data. If a supplier account is suspended it must be disabled from purchasing immediately; if budget is exceeded then workflow rules must kick in immediately. Real time system integration ensures success. This will be a daily state of best practice long after the agonising product functionality shoot-out in the selection process.
2. Does the product enforce business process best practice?
You most likely don't want to implement a system that just replicates the current business processes. There is the very high probability that you will achieve nothing other than a systemic adoption of inefficiencies and poor practices. Look for a system (and a business partner) that will coach you through the business process improvements necessary to realise the quantifiable benefits of the project.
3. Will the product move the effort forward in the life-cycle?
Currently the majority of work in the procurement lifecycle including financial allocations is done at the end of the process cycle during supplier invoice entry. If this was performed automatically at the beginning of the cycle at time of requisition then the financial data would be timely, accurate, and consistent and have reduced human input.
4. Will the product reduce human error in data capture?
Accurate codifying and allocation is the quickest way to drive down unnecessary administration and error handling. Wherever reasonably possible the product should only require the basic information to be entered by the end user and all other cost allocation, approval workflow, supplier selection, delivery address details etc should be automatically completed by business rules in the system. One of the biggest areas of contention in the implementation of procurement systems is the internal catalogue issue. Item catalogues are pivotal in guiding users to selecting the correct product from the correct supplier. The creation and management of catalogues can be a significant commitment but there are big paybacks in data integrity and contract adherence
5. Will the product eliminate administration?
Unnecessary paper handling, keying of data and seeking retro approvals are just some of the tasks that are costly and can be avoided. Without compromising internal control, if the procurement product is able to eliminate administration, the benefits will immediately start accruing.
6. Will the product lure end users to use it?
The biggest challenge is frequently to get the end users to choose to use the system and thereby guide them automatically through the process of adhering to the rules. Ideally the product will be easy to use and uncomplicated in its interactions with the general user community.
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