Why Digitise Procurement?
Why digitise your procurement processes?
In over a decade of consulting to both private and public sectors, we at Realyst have noticed a common thread in contract management is:
In the past, many of these issues are a result of the cumbersome nature of paper based systems and manual filing systems. Even scanned images into a document management system falls short, lack of data and disparate filing protocols.
So let’s sketch out an example of an ideal digital procurement process:
- The business identifies a need for some goods or service
- They fill in a simple application form, what its needed for, division, budget, etc.
- A search is undertaken for any existing suppliers on the database (The supplier should have a full profile, up to date BEE certificates, Financials, product lists, etc.) The supplier should also have the ability to keep this up to date at all times, without burdening the company with additional administration.
- Contract terms are located and an order placed
- Terms are signed off by digital signature, records available for different business functions
- Data is gathered and analysed for strategic procurement initiatives
But what if the goods and services need a new supplier?
- The supplier application process should be completed by the supplier, with capability to upload supporting documentation
- Any credit or other checks undertaken, but only once and not every time goods are purchased.
- A supplier listing (i.e. not necessarily contracted) is kept open for future opportunities
- Approval workflow governs the onboarding process
- Once approved a digital contract is automatically populated for digital signature
- Contracts are stored and shared between parties (in digital identity profiles)
- Notifications, tasks and obligations are shared.
- SLA’s are identified and reporting completed and stored via E-Forms, providing a track history of performance and rating.
- Once the contract expires, the respective files are archived.
By going digital the procurement function enjoys the following benefits:
- The governance and compliance issues, lost documents, etc are solved
- Valuable data becomes visible for reporting and strategic procurement
- The operation is far more efficient, no more manual drafting of contracts and filing systems
- Suppliers update their own information, so no clerical work required and manual data capture
- Contracts can be standardised, and drafted on procurements terms
- Turn-around times are improved, so goods and services become available quicker
- Full visibility into the procurement spend
- Payments only made against a contract, no maverick spend
- Suppliers are authenticated once, with simple updated information when required
- Compliance to protection of personal information regulations
- Data can be passed through to other systems, for example financial for payments.
For more on digitisation, head on to our blog here