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ePO Employee selects product from electronic catalog and creates requisition ePO application routes requisition to several approvers Application transmits PO and sends to supplier network (CXML, OBI, EDI, XML format, fax, e-mail) ePO Supplier ships product/electronically transmits invoice Invoice Match to receipt and purchase order Match invoice to check for supplier Start eProcurement - the business transactions between buyers and suppliers using the advanced electronic means of intranets, extranets and the internet.
Understand what you are trying to achieve through this exercise - trendy, catch-up competition, wring costs out of procure-to-pay cycle, empower users…
Work with suppliers that can make a difference for your pilot/proof of concept.
Make it easy to use: find products, codes, prices, approvals…
Event-based purchases: e.g. new hire’s phone, computer, network hookup, business cards,,,, or training workshop’s manuals, flip charts, overhead, markers, catering, room reservation…
Engage suppliers so they can get their offer to your people effectively.
30-second rule for a standard transaction - bookmarks of frequent and previously ordered items.
Integration into your systems - BOM, Catalogue, Budgeting, AP, GL… may require a Corporate Gateway system.
Easy administration for procurement & IT organization, auditing, business rules...
Custom catalogue for internal offerings and small, local, service vendors. Combine with content aggregation (common look & feel) of electronic feed suppliers puts all vendors on same footing for your business.
Let users connect to supplier web-sites directly - back office integration a challenge, and may raise issues of user productivity and company control.
Open Buying over the Internet (OBI) generates a shopping cart at the supplier, transmitted for approval by the buyer’s management, then executed.
Use Web technology to update your intraweb catalogue from your vendors.
“ Supplier Malls” third party operated on fee-per-transaction basis, often by vertical market.
Electronic auctioning - put your requirements out for bid. Brings prices down. Quality and consistency are challenges.
Don’t forget the contingency plan for non-catalogue items - 5-15%!
Benefits: 5-10% reduction in prices, 7.3 day cycle time reduced to 2 days, $125 PO cost reduced to $35, 25-50% reduction in inventory costs.
Components of ePO:
Self-service “requisition to payment” processing.
Electronic catalogs and web search capabilities.
EDI, ASN and other automated data transmissions.
EFT, P-Card and other efficient payment options.
Reporting and decision support.
Collaboration & Integration - Driven by Business Needs
Process change and integration is a business initiative that is enabled by technology.
Operating practices & policies stemming from integration are carried out with the aid of technology, not dictated by it.
Entrenching a process in technology is the like setting it in electronic stone
Incompatibility with legacy or tactical point solutions
Long product development and release cycles
Major development investments with long amortization cycles
Slow response to technological or functional innovation
Integrated Package Benefits Industry focus or functionally specialized expertise Faster time to market Lower development costs and reduced risk Customer buys only the applications they need Faster response to industry & technology changes Risks No common look & feel Conflicting or redundant data models Overlapping functionality Multiple vendor contracts No single point of support Release synchronization problems Frequently more expensive Niche vendors often lack geographic coverage Best of Breed
Modularity & Scalability - The world changes, so should you
Design with a modular approach.
Design for the future, reduce the risk of obsolescence
Design to minimize the cost of change for the users
Design to middle ground, handle larger and smaller installations as one-offs
Standards -- Don’t reinvent the wheel
Use industry standards & “off the shelf” solutions where possible
Manage the trade off between standardization & unique requirements
If standards don’t exist, create and promote them
Complexity -- KISS
Design to minimize the operational effort to run the system
Simplicity is preferred over elegance
Cost -- Engineering problems all have a cost component
Design must be affordable
Good technology is much cheaper than bad technology
Project Management: IT Projects Have a Poor Track Record... Over budget exceed schedule 60% On time Within budget 15% Terminated, not completed 25% META Group, 4/15/97 85% IT projects fail to deliver on time and on budget! 32 5 2 7 17 20 17 1. Inadequate Project Management 3. Poorly defined objectives 2. Lack of communication 4. Organization not familiar with project scope and complexity The management of the project is largely at fault!
To make sure it performs well enough to support your business
Implication: Each of these must be articulated!
Installation testing – that installation was properly performed on this platform, with most recent version
Parallel testing – of Functionality, Integration and Regression with current systems to ensure the results are consistent with your current systems’ logic, and if not, why not.
Volume & performance testing – ensures the systems support your business effectively (response times, cycle run-times) and expected peaks (raw compute capacity, update & data entry times, back-up times, print runs,…)
Successful management of change requires several key elements:
Successful Change Conflict & Little Change Confusion “ Do it when we have spare time” Gradual Change Frustration False Starts Sponsor-ship Vision High Priority Business imperative Resources Action Plan
Identify the key players ..and rumours are always 10 times worse than the truth!!! Rumour, myth, horror stories will emerge unless you tell people what is going on... Communicate Recognize Resistance Deal With Resistance Change Management - Communication Status, Timelines, Risks, Wins! Formal/informal, letters/events/posters/ videos/logos... Sponsors “ Targets” Change Agents Project X The Future The Benefits Over my dead body! £ Benefits Risks WIIFM?