Automate, Integrate, Extend….err Exploit
Often used to describe the road-map journey of an e-Procurement program, these three words (or correctly put, phases) represent in simple terms the crux of what needs to be done. e-Procurement transformation leaders aim to build the foundation by automating manual procurement processes there-by eliminating manual buying and moving towards electronic transactions. They focus next on integrating the planning and execution systems to move initially towards contract compliance and eventually towards an Analyze-to-Source (or Source-to-Analyze) closed loop mechanism. And finally, they aim to not just reap the obvious benefits of their investments incurred in the first two phases but Extend it by generating a self-sustaining “benefits momentum” via enhanced supplier collaboration, design/engineering collaboration, opportunity analysis, cost analysis, supply risks assessment and governance and control.
While the ROI is seen in all the three phases, it is usually in the “Integrate” and “Extend” phase that the initial drizzle has the potential to turn into a down-pour. And key to the benefits down-pour is a 360 degree enterprise wide Spend Analytics initiative. A recently published white-paper, Managing Costs by Leveraging Procurement Information Intelligently, offers a comprehensive yet refreshing look at achieving this 360 degree view of an organization’s cost structures via an ‘inside-out’ and ‘outside-in’ approach. “To overcome cost management challenges it would be imperative to get comprehensive knowledge about enterprise dollar outflows and the available opportunities (internal or external driven) to control it” says the paper. This statement couldn’t be more true today when the down-turn is causing the CPO to find innovative ways to reduce cost. So much so, that the mantra, Automate, Integrate and Extend, has right-fully given way to “Automate, Integrate and Exploit”. It is time to look “inside”, to review the investments made, to open up those flashy business-case with promised savings to make sure that those investments are truly exploited
