Internet-based requisition-to-pay automation (e-procurement) has been quietly delivering measurable value to enterprises in the form of reduced material and operating costs, improved compliance, and increased total spend under management. With pressures to increase spend under management and compliance, a growing number of enterprises are now looking to expand e-procurement deployments globally. Those considering such global expansion will face both opportunities and challenges both with internal deployment and adoption and global supplier enablement.

I’m glad to introduce Supply Excellence’s latest guest blogger, Suzanne Miglucci, to share experienced insight and recommendations for mastering a global e-procurement deployment. As VP of Marketing and Strategic Alliances at SciQuest, a leading provider of On Demand e-procurement, supplier management, and materials management solutions, Suzanne has first hand experience on what works in e-procurement and has actively assisted customers in organizing and deployment for global success. Suzanne shares her recommendations below:

It’s about time that most organizations view the procurement process as a strategic contributor to organizational value and overall success. Taking it a step further, your organization can also reap the benefits of the next big trend in procurement– the globalization of e-procurement.

How can your organization benefit on a tactical level by globalizing your e-procurement program?

• Integration of disparate ERPs: While mergers and acquisitions can establish immediate global reach, it might also create procurement challenges in the form of disparate purchasing systems. By implementing a global spend management solution, you can enable global visibility into spending, regardless of whether disparate ERPs may be deployed.
• Tactical growth: Establishing global reach and visibility with your purchasing program allows you to become more attuned to tactical growth – the growth of new products and markets and the optimization of processes and suppliers
• Supplier consolidation: Consolidating your supplier base creates more opportunities to identify low cost and reliable suppliers on a geographic basis. You may be able to take advantage of significant volume discounts and service-level agreements, allowing you to quickly gain a foothold in emerging markets.
• Lower operational costs: Labor and delivery expenses are often lower as well as material and manufacturing costs when procured according to geographic region.

How can your organization benefit by consolidating spend analysis and procurement data on a global level?
By globalizing spending, you have created a single point of purchase on a global basis, allowing you to increase ROIs from each supplier in your network. Globalization provides commonality in the way in which you roll-up data so it is most meaningful. Global reporting creates actionable data which can empower you to make better business decisions. Procurement starts to drive the revenue-generating ship. Pockets of inefficiency become visible where they were not previously.

What challenges can you expect by globalizing your e-procurement program?
As global organizations often support operating divisions in multiple countries, purchasing is typically performed on a geographic basis. This can potentially create a silo effect where disconnected pockets of purchasing take place across the world. In addition, bandwidth is required to develop strategies and procedures to institute and manage a global e-procurement program. Establishing purchasing offices internationally can also present ramp-up costs and support issues.

• How can you negate these challenges to ensure your globalization efforts are a success?
  Your organization should establish a core set of best practices when considering whether to globalize your e-procurement system.
• Localization: Can users, suppliers and vendors work in multiple currencies? Does your environment allow for multiple languages?
• Localized supplier network: As there will always be instances in which users must rely on local providers for certain good or services, providing a mix of global and local suppliers empowers regional pockets of users.
• Global managed service and support: A quality service and support program is more than simply managing a box and maintaining system uptime. Your provider should establish themselves as a trusted working partner of your organization. Routine upgrades, seamless iterations, and training should be integral parts of a quality managed services program.
• Other challenges and risks: Does your system allow for easy end-user buy-in and adoption of the new system and associated processes. The ideal e-procurement environment leverages technology innovations and external information and service support to address other issues such as time zone differences, intellectual property protection, and currency fluctuation.

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