choosing-the-right-Procurement-system

There are too many procurement solutions in the market today. Therefore the process of choosing the right system for your company can be a mind boggling task. The objective of this post is to address the hurdles one may face during the selection process and make the entire selection process simpler. Many companies feel that any procurement system will work on implementation and their organization will simply conform to the system functionalities, but the widely talked about failure stories of ERP implementation indicate that it is not the right approach.

Here are some tips you can follow to find the right procurement system for your organization

  1. Analyze the current procurement process

Analyzing the current process helps companies understand the strengths and pain points of the current system. Only when we understand the pain points of the current system, we will have a clearer picture of our to-be state. This will help you assess the various procurement systems when vendors showcase their product’s capabilities.

  1. Understand the requirements

Focus on the business processes and systems requirement. The more specific you are about requirements to the procurement system vendor, the more specific and detailed the procurement system vendors will be in their proposal.

  1. Assess the amount of customization required

Procurement systems which require maximum customization to configure and deploy in any company, add more cost to the implementation spend. Therefore it is more important to understand the underlying costs associated to the new system, including hardware costs, implementation costs, human resources costs, etc. The better you understand the costs associated, the better and cost effective system you will choose for your company.

  1. Appraise the potential benefits of the new procurement system

It is very important to evaluate the potential cost savings and efficiency improvements your organization expects out of the implementation of the procurement system. This helps your organization measure the benefits and verify if they will be able to realize favorable ROI.

  1. Acknowledge Change management

Change management can’t be taken lightly as it is a critical part of the implementation process. Implementing a new procurement system means a lot of changes in the way processes are done, so it’s vital for organizations to understand that and choose procurement systems which are user-friendly and at the same time easier to adapt to for the employees.

Most companies choose their procurement system based on factors like current buzz in the industry, brand value of the vendor and sometimes do it based on the price for which the procurement system is offered. Though factors such as buzz and brand name sound convincing, they are not always the right fit for every organization. Without a right fit, companies are often left with higher implementation time and higher implementation expenses. These are some of the prime reasons why choosing the right procurement product is important.

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