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Strategic Guide to e-Procurement

Procurement Tools

FMIS/ERP Systems

Financial Management Information System (FMIS) or Enterprise Resource Planning (ERP) System are complex computer software systems used to manage and assist with the operation of large organisations. Given the investment many agencies have made in these systems, it is preferable to leverage the embedded technology in these systems to take advantage of e–procurement instead of purchasing individual applications through a separate supplier.

Some ERP e–procurement solutions are not integrated during the roll–out. Verify with the ERP provider as to what was included or “turned on” during implementation.

These systems automate and consolidate different organisational functions such as Finance, Human Resource Management, Procurement and Payroll, under one software system. E-procurement software is often available within the FMIS/ERP suite. FMIS/ERP systems can affect all parts of the procurement process (sourcing, transaction and payment) depending upon how it is set up for use within the agency.

Typically, the decision to implement a FMIS/ERP system is made at the highest levels within an agency, due to the number of functions the systems will affect and the expense involved.

E-procurement software available in most ERP systems provides technological features including:

Functions and Benefits of the FMIS/ERP System image


All categories can be routed through FMIS/ERP systems, using electronic POs or catalogues. However, if the purchase transaction data does not need to be captured in the FMIS/ERP system, or if the risk of purchase is low, a PO may not be required and an alternate method such as a P–card may be used.

Summary of Checkpoints

FMIS/ERP


CASE STUDY 4

Consolidated Electronic Invoicing at the Australian Bureau of Statistics

The Australian Bureau of Statistics (ABS) used to operate an onsite storage room for their stationery supplies at their head office. This storage room was managed by 2 Full Time Equivalent staff (FTEs) and received multiple paper invoices for individual office supply purchases. When the ABS function moved office locations, they took the opportunity to implement consolidated electronic invoicing and a Vendor Managed Inventory (VMI) system with their stationery supplier.

In the new process, stationery cupboards are strategically located throughout the tenancy areas and are stocked with a range of ‘standard’ (or regular use) items. The level of inventory in the cupboards is monitored and restocked weekly, to pre–determined levels, by the office supplies vendor who is responsible for ensuring sufficient stock is available to meet all normal usage requirements.

The consolidated monthly invoice is e–mailed from the supplier indicating the items restocked in each cupboard and the particular project code for each order of non–standard items. A single point of contact at ABS receives this electronic monthly invoice, reviews it for correctness and uploads it directly into the ABS FMIS system. The result is that each individual project code is charged for the purchased supplies automatically. This process eliminates paper invoices as well as dramatically reducing the number of invoices received for office supplies to one per month.

As a single point of contact across all stationery purchases, ABS is able to monitor consumption across all individual cost centres within ABS and communicate to managers if their stationery consumption is exceeding average usage.

Due to the success of the combination of the consolidated electronic invoicing and VMI systems, ABS is considering using a similar model for other consumables.

Benefits:

Challenges:


Contact for information on this page: ICT Procurement


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Last Modified: 14 January, 2009