Electronic purchasing undoubtedly has its benefits but successful e-procurement is about more than great technology. It is about people, process and change management in equal measure, according to e-procurement specialist, Peter Robbins.
e-procurement: the catalist for change
It is widely recognised and documented that e-procurement can return considerable business benefits to an organisation. The National e-Procurement Project highlighted potential savings of £1.1BN could be had from an effective e-procurement process. The Chancellor's recent budget praised OGCbuying.solutions for helping the government to make £2.3BN savings across central civil government with the implementation of effective procurement frameworks.
In a nutshell, e-procurement automates manual processes to increase spend visibility, reduce rogue buying and provide a controlled purchasing environment in which efficient transactions with multiple suppliers translate into cost savings.
In addition, today's next generation of on-line aggregation software gives buyers the tools of procurement experts, comparing price and availability within one secure environment. Further added value management functionality is often offered as well. The bottom line is time and money savings that extend the reach of any in-direct procurement budget. Best practice equals best value!
However, a successful implementation will depend on users being happy to adopt a new style of working. Change management is a vital role any supplier and recipient organisation must undertake in partnership for the best results.
In the private sector, the degree to which organisations adopt change management strategies is often driven by threats to the business or customer dissatisfaction rather than business benefits.
In the public sector, it is slightly different as the combination of Gershon's call for joined up working with the 'Efficiency Review' and the ODPM's e-gov savings targets, amongst others, have qualified the reasons and benefits of change. E-procurement is widely recognised as a dynamic key to unlocking savings.
But with organisations undergoing 'Business Process Re-engineering' - mapping end-to-end business processes to reduce duplication of effort - in a bid to reach the zenith of 'Transformational Government' (TG), new ways of working and the management of inherent change must be sensitively developed.
Basic psychology tells us that people do not like change in any walk of life and this is especially the case in the workplace. Without the correct management, personnel can jump to conclusions that their jobs are under threat and that the term 'efficiencies' is the same as 'cuts' rather than best practice procurement.
Within procurement circles, this is perhaps amplified by the personal relationships that a buyer builds with their preferred suppliers as part of day-to-day activity. But it is sometimes this very 'friendship' that can breed complacency in an agreement, causing price drift - this is particularly true in the IT sector. Perhaps reason enough why competitive government frameworks are de rigeur and the days of off-tender purchasing are numbered.
The implementation of a structured process that does the 'running' work for a user will enable them to enrich their own workflow and position within the organisation by purchasing more for the same budget. But if you don't inform users of the benefits there is an immediate predisposition for them to perceive the implementation as a threat. Sensitive, managed and open discussions with end users on a regular basis is the key and this should be supported by the offer of appropriate training.
Too many organisations believe the technology they are installing is so powerful that it alone will drive seamless adoption. This is an organisational mindset that focuses on the installation and ignores the need to change how people work. A more holistic approach will take account of physical and emotional change. Old habits die hard but with an inclusive demonstration of organisation and end user benefits, successful implementation is possible.
Failure to consult users adequately can lead to frustrations and controversy, which undermine the project.
However, the latest technology that is user focused and easy to use should not need vast swathes of training or management to be successful and to that end many barriers to change will be broken down. Many organisations become embroiled in a tangled web of implementation issues when it is simply a case of communication within an open and honest environment in combination with the adoption of a best practice e-procurement process.
Modern technology is not rocket science to use, but with the public sector pursuing a road map of change, implementation issues cannot be ignored if the end goal is for increased back office efficiency, higher levels of professionalism, improved skills and accountability under the TG mantra.
Changes are inevitable, including the adoption of best practice best value e-procurement to achieve targets. How and when organisations choose to manage the two cornerstones of business as one, people and processes, for a more equitable environment, is a crucial step along the road to realising efficiency through e-procurement.
Peter Robbins, MD, Probrand Ltd