Contract to PO is a simple idea; negotiate the best price with a supplier and present the contracted items to your constituents for purchasing.
In government, public and private sectors, this simple idea is achieved in different ways and most commonly involves a paper based sourcing process on the front end and a paper based purchasing process on the backend. In many cases, these manual processes were established 20+ years ago and have changed very little over time.
Due to human nature, there is little thought of changing the processes to take advantage of the tools available in today’s market, even though the return on the investment can be accomplished within a relatively short period of time.
These are not complex tools to deploy, but they are, nonetheless applications that require some organizational change management to take place. In most cases, this involves re-evaluating current business processes, practices and policies that may have been developed years earlier and determine if they are still viable in today’s climate.
Once the new polices and processes are in place, they will allow the tool to perform at maximum efficiency to promote a better Contract to PO process. In addition, the cost of doing business with your suppliers will decrease over time as you can now point to historical PO data to drive down future supply costs.
In summary, implementing a tool to fix your contract to PO process will not be the silver bullet to fix your procurement issues unless you maximize its use and functionality. Plan to re-evaluate and implement new business processes as you step away from paper into e-procurement.
Filed under: Ask the Experts Tagged: | best practice, Contract to PO, eschoolmall, ESM Solutions, Mercury commerce questions, software as a service
