Procurement managers and procurement teams have their work cut out for them without the right procurement tools. Ineffectual procurement and acquisition strategies can lead to unnecessary risk, dark purchasing, harmful data inaccuracies, detrimental supplier issues and a longer purchasing cycle. To avoid wasting time, resources and opportunities, procurement teams can embrace a future-minded process with these six tips for improved e-procurement and acquisition.
Tip #1: Maximise e-procurement planning
The process of acquisition should involve coordination of all relevant acquisition personnel to create a plan. Acquisition teams can develop a strategy for not only facets of acquisition, but also post-acquisition management after purchasing. The following materials and tasks can be gathered and performed in a centralised fashion:
- need for justification
- budget approvals
- review of applicable laws and regulations
- identification of all personnel
- co-ordination of the acquisition steps per organisational and governmental requirements
- managing the purchase post acquisition.
HOT TIP: With Four’s leading eProcurement software – Contract Insight® – the tasks above can be performed and united on one central platform. Procurement management teams can positively transform procurement and acquisitions with rapid and automated approval routing, rules-based document collaboration, intelligent workflow and task escalation, integrated purchase order management and eSourcing software, and so much more.
Tip #2: Perform procurement market research
Due diligence with market research when undergoing procurement processes will help procurement teams to establish a firm understanding of which vendors and suppliers can fulfill the product or service needed at a given time.
Proper market research can be defined as a means of ‘collecting and analysing information about capabilities to satisfy’ an agency’s or organisation’s needs. Leading procurement professionals should examine which vendors can supply the best relevant products and services. As part of their proactive procurement research, teams can identify vendors’ capability when providing the service or product along with price and past performance information.
Tip #3: Prepare a bid solicitation
A robust and thorough solicitation typically specifies the following:
- organisation’s industry or background
- current state/situation
- preferred state/situation
- key dates (bid release date, questions due date, bid due date, anticipated contract award date etc)
- terms and conditions
- clauses
- payment terms.
Once a solicitation is prepared in a centralised and seamless fashion using a robust procurement software platform such as Contract Insight®, the buying organisation can afford potential vendors and suppliers opportunities via varying acquisition types. Depending on the organisation and solicitation type, the opportunity may be advertised publicly. A few of these bid types include the following:
- sole source
- best price
- qualifications
- best value
- bidding
- request for proposal (or information and quotes)
- contract purchase
- sealed bid
- private (by invite only), public, etc.
Tip #4. Master the selection process
The vendor or supplier selection process for procurement and acquisition typically involves many steps – but it is significantly streamlined with the aid of leading procurement solutions such as Contract Insight.
Procurement specialists, business users and other authorised stakeholders can use Contract Insight® to easily review and compare responses from vendors, rate qualifications, compare pricing and evaluate how well they meet the terms and conditions of the solicitation. The decision-making process should be made with key stakeholders and lead to contract negotiations of the final award terms of the contract or purchase order.
Tip #5. Closely monitor performance
Monitoring post-award acquisition includes – but is not limited to – using AI-based procurement and contract management software for creating a plan and metrics to rate the awarded vendor as well as measuring performance. It’s important to set reminders to check in on key contract and performance terms, and CobbleStone Software’s automated alerts are incredibly useful in this regard. If applicable, set task alerts and notifications to check in on budgets, rebates, volume discounts, milestones, and options to cancel or renew favorably.
Tip #6. Close out confidently
Once the performance term is complete and the contract or purchase is not renewed, ensure that the acquisition is fully closed out. This may include items, per the terms and conditions of the contract, to be returned, exit interviews to be conducted, and inspections to be done.
Successful e-procurement and acquisition starts with having the right process in place. Ensuring that the critical items are being addressed and that there is a plan in place will set you and your organisation up for success. Coupled with advice from your own legal counsel, these tips can help reduce risk, standardise the purchasing process,and improve the bottom line when contracting with vendors.
Contract Insight from Four
Contract Insight is acclaimed and preferred by procurement professionals across the world because the integrated software suite makes procurement so much more seamless, centralised and efficient – helping procurement, legal, contract management and other professionals to better manage contracts, vendor/customer obligations and various agreements.
Contract Insight is user-friendly, low-friction, rapid to implement, and easy to adopt. It’s proprietary contract intelligence engine VISDOM® AI can transform static contract data, bid analysis information and purchases into the dynamic central foundation that brings about proactive opportunities for better vendor and contract oversight, purchasing processes and risk management.
Contract Insight is a cloud-hosted (SaaS) or deployed (on-premise) contract management solution. The acclaimed platform is trusted by thousands of professionals for their contract management, legal document management, procurement and sourcing needs. Used by many Fortune 500 companies, Contract Insight gives you real time visibility into your contracts. It doesn’t just shore up your security; it will help you meet contract compliance regulations, centralise your contract management and improve your overall contract administration process.
For more information, contact John O’Brien, CEO at Four Business Solutions, global business consultants and software integrators providing business processes improvements in Finance, Supply Chain and Operations, across a broad range of industries.