How do you control purchases that don’t directly affect production or the way you do business? Are you still recording the needs of your managers, secretaries and site supervisors using Google spreadsheets, or trying to keep things under control by creating a separate work chat, making dozens of calls a day, and sending hundreds of emails? Where do your suppliers come from? Do you often fail to amend a contract the way you want to — before it’s renewed automatically? We’re sure the owners of expensive ERP solutions will say they don’t have any issues with that. And they will be right because they see how Enterprise Resource Planning handles direct procurement. But what happens to 30-40% of the budget, that is, with indirect spends, how the money is spent with PCard, and where purchase orders are sent to — all this is overlooked by ERP, and therefore, the top manager. Specialized information systems help maintain control over a third of the procurement budget. We’ve got access to one of those. It’s Acquirell, a SaaS solution that you can start using immediately.
What Acquirell can do: a look at the menu
If you take a quick look at the menu, you can see that, at least on paper, the system is designed for you to control and manage the complete procurement cycle — from collecting the requirements for materials and services to signing contracts and recording contract events.
You will see that it covers any situations that may arise in connection with the procurement. But this might be the way for the developer to leave room for event customization. The calendar is large and visual — assessing the volume of tasks related to procurement is easy. We’ve also noticed — though not immediately — that it’s scalable: it can show a work day of a procurement department employee at the minimum, and a month at the maximum.
We think there’s still a lot of interesting things to come. Stay tuned — or if you want to try figuring out the system yourself, go to acquirell.com.
Strategy: recording needs and preparing for procurement
The Requirements section has enough to offer in order to ensure that with indirect, you’re not left alone to deal with an endless list of emails from your colleagues, requests in the work chat, or phone calls from everyone who needs something for work. All the little things, without which the business will stop, or even novelties that the secretary needs to decorate the reception desk and greet customers with a sincere smile (“You can run the office without a boss, but you can’t run an office without secretaries” © Jane Fonda) are taken into account, can be organized and consolidated.
The requirements for identical products can be consolidated with a click of a button. This way, we can manage to save a couple of hours of work and probably money to buy tools. At the very least, we’ll be able to claim a wholesale price in the purchase order — and get it even from a supplier whom we’ve been working with for many years. We haven’t even started procuring yet and we’re already getting the benefits — not bad!
In Acquirell, you can create a procurement plan for the whole company, for departments, or individually. Like the sources of requirements, the terms can be set arbitrarily, as is customary within the organization: for a calendar or fiscal year, depending on the production cycle, or based on data on procurement volumes pulled from ERP.
One click, one name, two dates — and you can start filling out the procurement plan for the next year, for a new department or workshop.
There are many more interesting things to come: the answer to the question of how to ensure that contracts are executed on time, how to work with suppliers and organize procurement to get the best prices and terms for the supply of products and services, and how to collect all the information on suppliers in one place. You can do the same at acquirell.com. Or stay with us.
Converting consolidated requirements into a purchase requisition
It’d be nice if the needs of all employees were met. But then you’d have to say goodbye to your budget very quickly, and your PCard would exceed the limit in days, if not hours. That’s why here, in Acquirell, there are convenient, customizable tools you can use in order to legalize — that is, give a clear status to — and work with needs, requests, requisitions, and contracts. These are approval processes. After consolidation, the flow of requests from departments, the warehouse and production doesn’t look as intimidating as the one manually compiled in Excel — at this point, they can already be approved:
Visual, interactive approval routes — that’s what has impressed us most in Acquirell… until we tried the customization of the “decision-making” buttons.
You can create custom approval routes for requirements, purchase requisitions, and contracts with suppliers. And they can be as complex or as simple as you want: it all depends on your company’s work style, the established documents routes, and the decision-making methods.
You don’t need to hire a programmer or spend time learning the basics of software development to create a new approval route. You just add approval stages one by one, link the participants — company employees or roles — and specify the conditions.
Approval routes are not just visualized, they’re also interactive. This means that a predefined approval route can be adjusted with one or two mouse clicks. Deep customization allows editing the approval process: adding stages and owners, creating conditions for approving or rejecting a document, need or requisition. As far as we can see, all these actions don’t require a programmer.
You can coordinate and control not just the requirements but also the purchase orders. Definitions, delivery terms, prices and volumes can’t be made up or rounded off in own favor or in favor of an affiliated supplier.
Contract Lifecycle Management: managing contractual obligations
The contractual part of the system turned out to be just as interesting as the approval process. Visually, it’s very simple, but even at first glance, it allows you to monitor the fulfillment of contractual obligations by both parties. As you can see, the Contract Lifecycle Management section isn’t just a place to store your document’s digital image. Instead of a “John Doe” cloud of what-to-do-with-it questions, there’s an informative space where each contract has many standard attributes, from contract start and end date to the amount and renewal. Contract terms are simply extracted from the document to generate its card: the document is attributed and ready to work with, turning from a useless electronic copy into part of the contract work.
The most interesting thing appears to be the customization of everything related to contract work. Fine-tuning allows you to digitize contract processing and highlight the important events in its lifecycle: delivery and shipment, the payment, and the processing of claims and violations. In Acquirell, you can do it with just one click.
You can set up contract work using very simple tools. You won’t have to remember what actions on what contract you need to take — reminders of payment, imposition of penalties for missed delivery dates, and sending a message to a supplier won’t let you forget anything. And if you’ve been working with a supplier for a few years and the prices haven’t changed, you can add a date to the list of events a month and a half before the contract is renewed automatically — and create an event called “Prepare RFQ and send to the supplier and their competitors”. Or “Create a new sourcing event”. You might be pleasantly surprised with the result.
Sourcing events: tools for getting the best price from the best suppliers
Sourcing is the largest section in Acquirell — you can get lost here if you’re not used to it. It got easier when we realized that it was all about two components of successful procurement: working with suppliers, and sourcing.
There are quite a few sourcing events — ready-to-use tools can be used to get reasonable bids from suppliers.
As it turns out, though, you’re not limited to ready-to-use sourcing events. Using preset sourcing events combined with supplier accreditations, we select the best suppliers based on the criteria we consider important.
Maybe we need timely delivery after a morning meeting from a healthy breakfast supplier, and a prompt response to our requests from an office equipment servicing company. Or maybe we’re only interested in the price of services. Any of the delivery terms that are truly important to us should be added to the list of criteria we use to compare bids. Acquirell makes it possible: we can create an ideal supplier profile to purchase a single item or, say, products of a certain type, and purchase only from those suppliers who match the criteria. Think of it as making a sketch of a “suspect”, except that instead of a bad guy, we’re going to have a portrait of a good Santa to compare our suppliers with.
Supplier Management: know all about your suppliers
We all know that if you’re not sure about a supplier (and how could it be otherwise during the initial contact?), you have to go and do due diligence. But there’s only so much you can get out of the Better Business Bureau, the Thomas Register of Manufacturers, or the Hoover’s database, for example. Working with your own supplier database is much more interesting and productive. With Acquirell, we can create our own supplier registry that, in addition to the available official information (bank details, financial statements, etc.), also contains contractor data that’s important to us.
A supplier’s background obtained from your own experience of working with them instead of a third-party database is probably better than data from the Better Business Bureau. Every company has information on a contractor’s activity, successfully executed contracts, violations, certificates, and experience. But this information is scattered all over the place. By creating a supplier log, we can collect it in one place, in a form that’s convenient to work with and populate with new data.
We’re convinced that you can — and need to — manage Indirect Procurement just as effectively as Direct. At the same time, you don’t need to have a budget to buy, build and maintain IT infrastructure. Sophisticated SaaS solutions are capable of generating and consolidating needs, automating supplier selection, using a number of sourcing events, and managing contract events. And it looks like we have one of them right in front of us: one that, at the very least, can offer flexibility in working with suppliers, procurement, and contract management.
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