What does successful purchase requisition look like?
The buying process for most businesses in today’s world is hugely complex. From small businesses to large enterprises, in any sector, product or services companies; the risk of tiny elements being missed throughout the purchase requisition (PR) process is high and can have huge impacts on businesses, regarding if you are the vendor or the purchaser.
This can be anything from missed project delivery, due to a product not being where it is supposed to be at a certain time, to a loss of a new customer as a piece of equipment was not delivered on time.
These minute errors usually result from incorrect data, whether it is unintentional human error on data entry point, duplicate data as a result of multiple disparate systems, delayed order process resulting from late approvals, just to name a few.
The buying process involves many stakeholders, each with their own set of unique requirements, such as:
There are two key stakeholders here:
The purchaser, from two aspects –
- The originator – typically departmental project managers/directors
- Have an easy to use system enabling them to purchase goods and equipment as the project demands
- Have a quick approvals process to ensure timely order placement and delivery scheduling
- Ensure all goods are at the right place, at the right time to carry on project work
- Be informed at all times of PR status
- Have access to delivery tracking to ensure all goods are received at the right time and in the correct location
- The executor – typically the finance or purchasing department
- Ensure you have a list of vendors in your book
- Accurately capture order from the originator
- Match order to product/service in order book, according to specifications and details from originator and vendor
- Collect all order details and generate correct purchase order / contract of services
- Make these available for proof before signing contract
- Follow an established sign off process
- Track order through delivery to guarantee product is in right location / service delivered as per contractual agreement
- Ensure payment terms are met
- Have easy access to details in case a problem arises
- Be able to share all PR information with stakeholders in case of problem resolution
- Provide reports on purchasing history to identify productive suppliers, cost effective purchases and recurring purchasing needs
- Create financial tracking to ensure purchase costs are allocated to project delivery and added to customer invoicing (where appropriate)
- Ensure your product/services are listed in the catalogue of potential buyers
- Keep contacts with potential buyers to be in their minds
- Identify any potential large purchase opportunities
- Ensure potential buyers have up to date information on your company and any offers
Each of these particular sets of requirements MUST be properly administered to ensure purchase requisition / order processing success. However, all too often this is not the case as there are too many elements which as all managed in different ways – typically a mix of manual data entry on multiple systems with external communication channels and only a manual authorisation tracker.
Here is where #digitaltransformation offers incredible opportunities for all stakeholders in the order and purchase requisition process. Essentially digitising this paperwork process, adding automated notifications through a workflow brings EVERYTHING into one unified system. Connecting vendor/supplier more closely to the purchasing companies, and individuals within both reduces risk as it eliminates duplicate manual data entry, automatically sends notification and status of the purchase requisition / order / delivery tracker.
Say, for example in the construction/engineering industry: Any delays can be displayed in a dashboard – this is hugely beneficial to the project manager who may have several PRs going on at the same time – they can see where certain equipment is due to be delivered to ensure their projects (which rely on said equipment) can be continued on time. If there are delays that project manager can take proactive steps to work on a different task until the equipment arrives, or they can contact the relevant companies to see what the delays are.
One of our clients, Tideway Central improved their order and purchase requisition process ensuring all equipment was at the right place at the right time, improving multi million pound project delivery: http://techfinium.com/tideway/
This is just one demonstration of how risks can be reduced during the order / PR process – by using a software solution to bring all the elements of complex order and purchase requisition processes together. Our purchase requisition solution InfoFINIUM does exactly that. Some other engineering clients have been able to improve their processes by digitising their paperwork. Have a look at these success stories of #digitaltransformation:
AM Hydraulics reduced paperwork, improving project delivery and saving time & costs: http://techfinium.com/am-hydraulics/
DSJV managed document control systems with multiple companies working on a unified project to improve delivery: http://techfinium.com/dragados-sisk-jv-dsjv/
Want to learn how to mitigate risk and improve your ordering and PR process? Then get in touch today, let’s start a discussion!