Bellwether Software is a leader in purchasing software, eprocurement software & invoice management software. Toni Balla is the purchasing manager for Tel Hai Retirement Community and she shares her customer experience in this video.
When is the last time you looked at your procurement division? Have you updated any of the processes recently? What about personnel? Are you encouraging them to continue their education and development? Or perhaps someone has just been filling that role temporarily and it is now time to move them into something more permanent and hire someone with the education, experience and background necessary to make a complete transformation of your procurement processes. Sound scary? We aren’t talking about massive overnight changes, but rather a consistent, strategic approach that over time will yield tremendous improvements to the entire company.
Sanofi, a global healthcare company, spent several years making over their own procurement policies and procedures. As a result, they have experienced a 60% performance improvement for 20% reduced cost. Those numbers should get your attention. How would you organization like to realize that type of improvement over the next couple of years? Is it possible? Absolutely! Is it likely? Well, we certainly cannot guarantee those results for everyone, but does that mean you shouldn’t try? What if you only improve 50% or 20% or even 10%? You have still improved so it is time to get to work.
In order to make a complete transformation you have to look at everything: organizational hierarchy, personnel, processes, systems, and software. It could be that you hire an unbiased third party to do an analysis and make some recommendations or maybe you take a representative or two from each department and form a task committee. There are pros and cons to each. If you opt to work internally, be sure that someone with meeting experience moves every meeting along in a timely and professional manner so that they don’t become gripe sessions or wasted time. You will also need someone, possibly the person running the meetings, who has final authority in making decisions. Even though we live in a country accustomed to elections, votes, and everyone having a say in many decisions, these changes cannot be left to “majority rules”. There may be a time with the decision maker has to step up and break a tie or possibly overturn a poor decision, even one that is popular among the committee members.
Once that is in place start looking at everything. The advantage to utilizing people from various departments is that you may quickly discover problem areas in the hierarchy – areas where communication breaks down, decisions are delayed, or redundancy takes place. Whatever the problems, if allowed to speak openly without concern for reprisal, you may be surprised at what you discover.
When looking at the personnel involved it could be a little problematic using internal resources. Depending on the existing structure, any new structure or hierarchy established, and the people involved in the purchasing and procurement department, you obviously cannot have peers calling for replacements or recommending that someone else be in charge. Or the discussion could involve brainstorming ideas for new positions that don’t yet exist. Just exercise a little wisdom in what form and function this topic takes.
Finally, you will want to examine the processes, systems and software you have in place. All of these are intricately connected and tied together. It may be that small revisions need to be made over time or it could be that the entire system needs to be rebuilt from the ground up. Which direction you go will depend largely on your budget, goals, and what conclusions you draw building to this point.
This may all sound overwhelming, far-fetched or downright impossible. But it has to start somewhere. Use this article to get some discussion started with your peers, your boss, or company executive. Bring it to your next executive meeting and get it added to the agenda. Present it to your management team and ask for feedback and ideas. The hardest step is always the first. Get that started, break it down into manageable goals and find your company on a journey to improve in many areas.
Does e-procurement software integrate with accounting & other financial systems?
Yes, but the level of ease depends on which e-procurement software you use and which financial system you use. Bellwether software integrates with a variety of accounting systems and ERPs.
If you use a different system or one that doesn’t integrate then it could require some additional steps to get the two systems to work together. This can be done in a variety of ways such as using out-of-the-box adapters, 3rd party packaged APIs, web services or hiring a program to create custom code. There are pros and cons to all these solutions.
What ROI can I expect with E-procurement systems?
There are a lot of variables so we need to look at this in general terms. First, you want to set a savings target at 5-10% of your annual spend. E-procurement systems cost anywhere between 4-figures up to 7-figures. Your company’s annual spend is going to be very different from another down the street and another industry. So look at your particular situation, run the numbers, and figure out what kind of ROI you can expect. You’ll want your e-procurement system to pay for itself within a year or two.
When considering the internal and external costs savings for automation versus manual processes do suppliers have statistics to help evaluate? How can these statistics be captured?
Most suppliers already know and seek out the benefits of automation. Automated receipt of a PO into their order management system reduces their labor costs. Many of the larger suppliers have call centers with agents who replicate orders received via fax, mail, or phone into their systems. Imagine the labor cost involved with these call centers for dozens of employees or even hundreds? That can get very costly. Automation is more accurate than re-keying orders. Even the best will make mistakes and with the high turnover involved you’ll have lots of inexperienced employees at any given time. Mistakes keying these in will lead to wrong products being delivered and corrections being made at the expense of the supplier, not to mention time and lost business. Finally, automation means the order isn’t sitting there waiting for some employee to get to that point in the stack to enter it into the system. This means that products are delivered sooner and everyone is happier.
Attaching an actual number to these benefits is another story altogether because each supplier’s situation is unique. However, you can get some insight into these metrics by measuring and tracking everything. Look at mistakes in automated orders vs manual entry orders. What costs were involved correcting them? Look at your end-to-end order and delivery process. How long did it take from the time the order was entered until it was received? How many times were deadlines missed and how did that affect business and sales? How many times were the wrong products were delivered? Then go back and look at it all again to see how automation can help improve all these areas.
April 15th means different things to different people and different businesses. Some businesses dread the day as much as most people across the country while others get creative and try to attract new business. Then you also start seeing advertising for various businesses promising special deals just in time to for all those hundreds or thousands of dollars of individual refunds. So where does your business fall in this and did you survive?
Tax Day Freebies. If you scoured the internet you could find coupons and special offers for things like a free curly fry at Arby’s, small popcorn at AMC Theaters to free sandwiches, cookies, photocopies, and even chocolate fondue. Do tax day freebies really help? Are people looking for free things to relieve the stress of taxes? If this is something your business has tried please comment below and let us know how it worked or didn’t work and what you’d do differently next year.
As of March 16th, the IRS had processed over 75 million returns with 65 million refunds. That’s a lot of people with a temporary swell in their bank account balance. Many have it spent before it arrives while others do a little day dreaming. You’ve likely seen everything from appliance stores, computer stores, car lots, and even small mom & pop shops offering special deals if you sign your refund over to them. And again, if this is something your business had tried please comment below.
But when it comes down to it, small businesses struggle with taxes like most Americans do. According to the National Small Business Association small businesses get frustrated with the complexities of the tax code and spend 120 hours or more preparing their taxes – that’s 3 full work weeks! And if that isn’t bad enough 84% hire an outside accountant or tax practitioner to handle their preparations.
If your business is frustrated with the tax system what can you do to ease your burden? One of the things that can really make or break you is your record keeping. How detailed are your records? Do you throw all your receipts in a file… or dare I say a shoe box? What about inventory, cost of goods sold, and cost of all that stock you didn’t sell?
While it is still fresh on your mind, take a moment to look into upgrading your purchasing system. A quality, cloud-based system can help your business on many levels, and accurate records, receipts, and reports that can be printed at the push of a button will go a long way to helping you this time next year.
The recent development and globalization has produced more convoluted supply chains. The irony to this is that there are greater risks to face. Checking the vulnerability of the supply chain network of your company can be utilized in order to determine those risks along with the weaknesses. Once these factors are identified, it may lead to design improvement on your strategies along with corrective action plans as being part of the procurement risk management.
The modern supply chain is gradually becoming more and more complicated because of the many different skill levels and failure to notice adverse occurrences in the procurement companies and suppliers. Due to this, a number of suppliers create quality control skills and exceptional design, whereas other requires assistance when it comes to the persistent supervision and fundamental issues. Furthermore, there are suppliers that execute an exceptional job on implementing learned lessons and up keeping high quality level, safety and production. These companies simply hold a principal supplier management level, which is established in order to record their level of excellence when it comes to safety, production, design and quality. A number of these suppliers should be assisted along the entire levels of production, safety, design and quality. They should also have good rechecking in order to make sure that they are being redirected from the favorable practices.
Comprehensive analysis of the supply chain target acquisition is essential during any process of due diligence. Comprehending the areas of opportunity and risk within the supply chain may be crucial in the assessment of business in order to lessen risk and assist in supporting the deal theory. It is highly important to perform the mundane work of checking and rechecking supply chain, doing due diligence, setting up safety procedures, executing random checks, and making sure that a high level of excellence is maintained. Incorporating these tasks in your strategies is highly critical because those will surely offer help when rival supply chain problems take place.
In addition to this, you may even acquire some favorable profit when these unfortunate instances occur. One example for this is the case happened to Sainsbury. According to the chief executive of the retailer, the continued investment over time in the company’s supply chain along with the local sourcing provided Sainsbury a distinct advantage over its rivals when they began to suffer losses due to the horsemeat scandal.
During the worldwide scandal, many of Sainsbury’s competitors were forced to pull products from store after being found to contain DNA traces of horses and other things not listed in the product. As a result of their due diligence in the supply chain, the Sainsbury Company was unaffected.
Consider this scenario and what you can learn. See if you should follow suit and heavily invest in your own sourcing credential and supply chain; but don’t stop, make a regular and on-going part of your business over several years. Who knows? It could be that your company will face something similar and rise to the top because you provided great attention to your supply chain.
When it comes time to make purchases and plans for future purchases where does the money come from when the budget is often very tight? By measuring the cost savings when it comes to crucial items for an organization, purchasing managers can demonstrate to the company executives/board and other decision-makers how money can be repurposed through proper spend management.
Imagine the excitement when the purchasing manager reveals that those savings acquired from procurement can now be measured in the form of musical instruments for a music college, quicker renovations for a hotel, and better medical equipment for a hospital. You take procurement savings and essentially convert them into the form of valuable products that will enhance the overall business and all of the sudden you have the attention of stakeholders.
Whatever industry you are involved in you can draw from these examples in order to achieve your goal of playing a more strategic role in the company. It is crucial for buyers to determine where they could create a discernible difference. Be at the top of your game and utilize the Kraljic Matrix to isolate and find key areas for improvement. Instead of simply looking at costs make sure you see what areas can make changes and provide an advantage for the rest of the organization. It doesn’t even have to be essential to the core business like the examples above. It could be something as simple as finding a way to provide cleaning services, lawn maintenance or a better office location.
Become proficient in these techniques and look for an opening to present to a group of key executives or stakeholders. Consider using the Kraljic matrix and discuss how you’ve been able to utilize procurement to not only improve the purchasing and spending of the company, but to make improvements in other areas. Being careful not to get bogged down in the details and number crunching aspects of purchasing, you can paint a broad picture that will often appeal to their entrepreneurial minds.
This Kraljic matrix assists people in improving a procurement strategy for the services and products their organization consumes. This medium aims to get rid of as much supply vulnerability as possible and make the most of their potential purchasing power. It also enables you to work in a wiser way with the suppliers you have already. In fact, this is the relationship you should be looking forward to fostering with each of your suppliers. It functions by organizing the product’s profit impact on a certain axis, and the vulnerability of the disappearance of their supplier on the other part.
Procurement managers can utilize this medium in order to provide company executives on board with the strategic role they can play within the overall success of the company.
The low initial cost of SaaS applications is very enticing to a small businesses and there is no large outflow of capital to set up an application on the computers used by the company. SaaS applications are charged based on the subscription rates per user and any additional charges for storage or bandwidth usage. So the business ends up paying for only the actual use by its employees.
SaaS applications can be used on almost any device that can be connected to the Internet and is not dependent on the hardware quality or storage devices installed on each device. There is little to no learning curve involved especially where employees are already used to working on the Internet.
There is no need for the business to worry about upgrades and patches as the SaaS application provider would be doing these improvements on an almost daily basis and the upgrades would be available to all users at all times. So there is no downtime of computers frequently associated with such upgrades where the applications are installed on the computer.
Most SaaS applications are very easily integrated into any existing software with a business. They can also easily expand their capabilities to cater to any increased usage in an organization once the minimal hardware is in position.
The owner of a small business is easily able to log onto the SaaS applications from wherever he or she is and therefore be in constant touch with the latest data available in the company’s storage. This also allows a small business to authorize its travelling representatives to use the IT knowledge of the company from wherever they are.
Bellwether Software offers its #1 rated modular web-based software in three convenient ways: for purchase, software as a service or software as a service to own – a newer feature where you eventually convert to an annual license renewal fee only.
For more information of Bellwether’s ePMX: purchasing software solutions and SaaS pricing, contact Bellwether today at 888-698-1398.