Understanding Your Spend: First we need to gathering the data as to what you’re buying, who you’re buying from, in what quantities and at what price.  An eProcurement system setup in a wide-open configuration can be the engine that collects this data.  A wide-open configuration means that the system is setup to provide full autonomy for local buying decisions.  The idea here is not to change behavior but to simply capture the buying decisions your organization is making.  Implementing an eProcurement system in this configuration and running it this way for several months will allow you to gather your spend data in a centralized database for analysis.

Rationalizing Your Spend: With your spend data collected in one place analysis can start.  You’re looking for opportunities to consolidate vendors and items so you can drive more volume to fewer vendors and get more negotiating leverage.  With this data in hand you can start vendor negotiations and put some supplier contracts in place.

Optimizing Your Spend: Now that you have selected specific vendors and have contracts in place you can begin to tighten controls in the e-procurement system in those areas, and begin to change behavior amongst your buyers to drive volume into your contracted suppliers.  As you gain more confidence in your ability to measure, predict and control spend you can be more aggressive with volume commitments to suppliers in exchange for better pricing.  As you setup contracts in new categories you will reconfigure the eProcurement system to tighten controls accordingly to drive volume into those contracts.

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