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E-procurement is no panacea.

The benefits of e-procurement can be huge savings, but experts warn that it has to be implemented correctly or it will never work.

E-procurement contributes savings to the bottom line, but it is not a general panacea, according to speakers at CIMA's hot topic forum on implementing e-procurement.

"The benefits of e-procurement are clear," said Claire Ighodaro, financial controller at BTopen-world and vice-president of CIMA.

"It can make huge savings for a company by reducing administration costs, such as purchase orders, and the price of goods purchased."

"But there's not a snowball's chance in hell of e-procurement working if you haven t sorted out your procurement processes first," argued Ralph Simpson, e-business project manager at Walker EMEA. "You need a procurement strategy and procedures in place before you introduce e-procurement, otherwise you're just introducing more complexities on top of a mess."

Des Quigley, procurement consultant at Halifax, who was part of the team which introduced e-procurement at the bank in 1999, agreed. "A successful e-procurement initiative should complement your existing systems and support good procurement practice," he said. "It should be procurement-driven and not systems-driven."

Procurement should be seen as integral to the business, not separate from it, argued Tim Cooper-Jones, European e-procurement programme director at Unilever. "E-procurement is hard work and you have to involve all aspects of the business," he explained.

All the speakers agreed that good communication is a key part of any e-procurement programme. "You need to make sure everyone in the organisation understands and can use the new system, or they will turn to maverick buying," Cooper-Jones said. This is not just about talking to staff. Organisations should also work with suppliers and customers to limit the disruption of e-procurement. Unilever, for example, set up a newsletter a nd website to talk to stakeholders.
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Author:Hayward, Cathy
Publication:Financial Management (UK)
Article Type:Brief Article
Geographic Code:4EUUK
Date:Oct 1, 2001
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