Paperless Procurement
To reach the point of "hands-free" procurement, companies must manage purchasing processes by exception. How? By implementing processes designed to take advantage of the Internet, managing those processes by exception, and continuously analyzing and...
[From iSource Business, February 2001] Ask Pam Miller, accounts payable manager at building materials seller BMC West, how many filing cabinets she needs to store and catalog the 500,000 paper and electronic invoices that pass through the billion-dollar Boise, Idaho-based company every year, and she will happily report the answer: none.
Miller and BMC West are practicing one of the principles of "hands-free" procurement by archiving the company's transactional paperwork in virtual filing cabinets, a practice which has allowed BMC West to reduce staff time for processing invoices and to simplify the process for resolving transaction-related issues with suppliers. In doing so the company is on the leading edge of a trend toward managing purchasing processes by exception.
Too Many Touchpoints
A year ago Laurie Orlov, research director at the Cambridge, Mass.-based technology consultancy Forrester Research Inc., made a splash by predicting that "high-touch" e-procurement systems would not deliver the major savings promised by online purchasing at those companies that "stapled their procurement processes to people." In her January 2000 report, entitled "Hands-free Procurement," Orlov writes, "The problem with today's approach to e-procurement is that it doesn't eliminate manual inefficiencies." In other words even after automation the purchasing process involves too many people, creating a maze of "touchpoints" for transactions and impeding e-procurement efficiencies it is supposed to produce.
The solution, Orlov proposes, is threefold: Buying organizations must (1) implement new processes designed to take advantage of the Internet; (2) manage those processes by exception
