June 14, 2019, By BirchStreet Admin
Many of our customers who decide to implement a new eProcurement or Procure-to-Pay system tell us they want it for one or all of these reasons: one centralized and automated platform, a way to better connect with their suppliers, a more efficient process to reduce costs, more visibility into their spend, more control over their purchasing and better compliance. The bottom line is really that – higher profit margins.
Calculating ROI on a P2P Platform can be difficult, as most businesses have their own processes and business rules, so one size doesn’t fit all. It boils down to figuring out what your current business state is and figuring out the desired business state. The size of the gap in between the current and desired states will help determine your ROI. Most BirchStreet customers see between a 10% and 15% reduction in costs, although it can be as high as 20%.
Whether your business requires an eProcurement system for purchasing products and services from your suppliers, creating purchase orders, getting approvals, receiving and reporting, or a fully loaded Procure-to-Pay Platform, which can also include AP Automation, Inventory Control, Recipe Management and Capital Budget Management, you should consider the following factors when making your decision.
Different systems have multiple ways that they store and maintain supplier catalogs. Best practices show that supplier portals, where the supplier enters and updates their data and catalogs online, make the purchasing process the most accurate with up-to-date pricing. Some systems charge suppliers, while other systems are free of charge. Best practices advise that systems with no charge to the suppliers are better as there is no barrier of entry, especially for smaller vendors.
Look for a solution that is specifically designed for your sized company and industry, with features and functionality that help your property operate at maximum efficiency. For example, businesses with restaurants or F&B outlets, would want to consider a recipe management module allows you to track nutritional values, allergens and intolerance, control food consistency and quality, ties into inventory and purchasing, create recipes and monitors your margins. Other hospitality-centric modules include capital budgets, capital projects, sourcing and banquet management.
Detailed reporting capabilities can help companies reveal trends, stay within budget and make better decisions with real-time data. In your selection process, the system should have many standard reports and customizable reports as well as ad-hoc and automatic scheduled functionality. High level and detailed, drilldown level should be available as well.
eProcurement and Inventory Control modules can work together to generate automatic purchase orders and requisitions through par level alerts. This will protect you from spoilage and loss by eliminating under and over ordering based on your business rules. Depending on your business rules and supplier relationships, low priced items can be flagged in this automatic process. The creation of Order Guides or Favorite Lists should be standard functionality.
Procure-to-Pay Platforms should be easy to learn and use, so that purchasing, operations and F&B staff can become proficient quickly. Corporate or Executive level users should look for easy reporting tools and with graphical interfaces, which helps to reduce the learning curve. Dashboard features, buttons or tabs should all be easy to view and find.
When selecting new P2P technology, consider the future and choose a system that’s scalable enough to expand as your property grows. In hospitality, it is common for many companies to buy and sell properties, add new clients for hotel management companies and continue to add restaurants and other outlets. A cloud SaaS solution often adds the most flexibility and scalability for companies.
Integration with your accounting or ERP system is important in capturing and sharing your data and spend with your other business systems. Other types of integration that are common with P2P systems, such as POS and human resources, will help streamline your processes and data. A company with a large development team is ideal when considering how to integrate your different systems.
It’s important to build a connection and level of trust with your vendor during the “courtship” period. Your solution provider will become your partner, which must continue to be built over time. Select a company with a proven track record in your industry, with similar sized as well as bigger types of customers. Make sure the company is in good financial standing and has a good team in place. And finally, what does their technology innovation pipeline look like? New and exciting products should be coming in the future.
Procure-to-Pay automation solutions are available to help simplify complicated business processes. By implementing a P2P system, the foundation is built to capitalize on cost savings, gain efficiency and improve profitability. When your operations run smoothly, your customers and guests will keep coming back for more.
For more information on BirchStreet’s Procure-to-Pay Platform or to learn more, please email email@example.com or call 949-567-7000.
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