Five steps to create a business case for procurement technology

24 May 2013

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24 May 2013 | Rebecca Ellinor

The business case for procurement technology can be made in just five steps, according to presenters on the latest Supply Management webinar.

The debate, held live online yesterday in association with Atos and Oracle, found the majority of buyers who tuned in (78 per cent) are dissatisfied with their current procurement technology.

Neil MacKenzie, partner and head of procurement consulting at Atos, said the five stages to win investment for better procurement technology were to start with a high-level business case, establish the user requirement, consider alternative technology, build the case for change and plan for the delivery of benefits. With regards to making the case, MacKenzie advised: “Don’t just talk about the numbers and make sure you express the business case in the language of the organisation."

Nick Caton, EMEA head of facilities management procurement at AstraZeneca, said his company was currently reviewing its source-to-pay technology to deliver a common end-to-end process for indirect spending. It plans to integrate sourcing, purchasing and paying with a common buying platform. Phase one, he said, is to roll this out to much of Europe, Brazil, China and Mexico, with phase two focusing on the US and Japan.

Andrew Simpson, ERP leader at Atos, said the level of maturity of the procurement organisation was the key driver. This, he said, affected the scope of the solution under consideration, the speed at which it could be deployed and which delivery option was selected – for example an onsite solution, business process outsourcing arrangement or software as a service.

MacKenzie said the elements that make up the business case can be covered in four areas: the quantifiable cashable benefits, the non-quantifiable cashable benefits, non-tangible benefits and costs. “We don’t put the business case for procurement technology together very often. We need to think about the how and when of the business case to get the benefits into the organisation and then track them,” he added.

Simpson said two to three months is probably the average to get a business case approved, but it’s possible to do it in six to eight weeks with an aggressive approach.

In terms of the size of business that can justify investing in technology, Vikram Singla, business development leader at Oracle, said organisations should consider what benefits could be derived and value added, irrespective of their size.

Caton said you need cross-functional teams to consider the business case – not just procurement. Both internal and external stakeholders who will be using it should be involved, as well as colleagues in technology and finance.

Watch a replay of the webinar here

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