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Strategic Guide to e-Procurement

Starting Out

Understand your current state of procurement

Prior to launching any e–procurement initiative it is necessary to identify how e–procurement initiatives can drive benefits within your agency.

A current state assessment will highlight any business problems or inefficiencies experienced in the purchasing process, and help pinpoint those areas where e–procurement technology could streamline and automate the procurement process.

Understand your current state of procurement

Prior to launching any e–procurement initiative it is necessary to identify how e–procurement initiatives can drive benefits within your agency.

A current state assessment will highlight any business problems or inefficiencies experienced in the purchasing process, and help pinpoint those areas where e–procurement technology could streamline and automate the procurement process.

It is necessary to understand:

• your agency’s procurement strategy, objectives and future directions
• the business rules that apply to procurement
• existing and past e–procurement initiatives in your agency and other agencies
• e–procurement functionality available within your Financial Management Information System (FMIS), Enterprise Resource Planning system (ERP) or those systems available to all agencies such as AusTender.

It is also necessary to:

• review all of the elements of procurement to develop and deliver a complete
  solution including:
• • an analysis of spend categories, transaction volumes and other procurement details to identify which spending is best suited to e–procurement
  • which contracts and preferred suppliers are most used
  • categories or procurement processes that are seen as “problem areas”.

By developing an understanding of your current procurement processes you will be in a better position to develop e–procurement initiatives that will best support your present and future business needs and will compliment other organisational strategies.

Align e-procurement with your broader procurement strategy

When selecting e–procurement technologies, remember the best solutions are often the simple ones.

• Take a strategic view – look at the whole procurement process

• Look for a holistic solution – integrate, re–use and communicate.

Points to consider:

• the interoperability needs of your technology. An integrated technology strategy will need to fit with the components of your procurement processes. Limit your risk – don’t use technologies that would be difficult or might not integrate.
• scalability – make sure your solution fits your needs
• open or modular products – look at all the possibilities. Ask the question – can you use software that conforms to standards and supports the interchange of data using open standards and formats?
• make sure when making decisions about your purchasing practices you have taken into consideration all Government guidelines for example, environmental guidelines. The Department of Environment and Heritage has developed guidance for Australian Government agencies on environmental purchasing (sometimes called “green’ or “sustainable” purchasing) which can be accessed at www.environment.gov.au/settlements/publications/government/purchasing/purchasing-guide/index.html [].

Plan your e-procurement implementation

Some e-procurement implementations require significant change management to fully realise all potential benefits. Others may require only minimal change. Regardless of the size of the project the e-procurement implementation should be managed as an integrated project. For a successful outcome:

• develop a robust business plan
• develop a project management plan that outlines the major outcomes, outputs, project activities and timeline
• set project milestones and track progress against them
• appoint a single point of accountability (SPA) to manage the project
• understand ongoing administration and allocate personnel to manage these tasks.

Summary of Checkpoints

Planning

• a Use e–procurement to address procurement business issues
• a Identify where the most business value can be derived from the project
• a Consider e-procurement within the broader context of the procurement task
• a Break the task into simple or smaller projects and tackle them sequentially to help you build momentum
• a Be mindful of incremental benefits
• a Establish a “champion” or senior management owner who supports the initiative
• a Involve stakeholders at all stages of the project
• a Change management is the key to a successful implementation.

Contact for information on this page: ICT Procurement

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