Mike Day, Co-founder and CEO of IndiCater, looks back at the development of e-procurement.
The e-procurement arena today offers exciting new choices and opportunities, but are we taking full advantage?
Over three years ago, I wrote an article for EP about e-procurement, sharing my view that its impact would quickly be felt across all operational levels within the food service sector. With so much current discussion surrounding the changing role of procurement and its professionals, I have taken the opportunity to revisit my article and see if my predictions were accurate.
A few years ago, larger food service organisations began using e-procurement as a platform for modern efficiency. In the technology arena, my company, IndiCater, has experienced first-hand the continual shift away from paper-based procurement solutions towards embedded software systems. Applying e-procurement processes across a business continues to ensure that centrally negotiated prices are rigorously applied, procurement teams lock down product consistency, whilst guaranteeing that invoices and delivery notes are received and processed in a timely manner. As a by-product, the suppliers’ role of manual invoice processing, tele sales/faxed order transmissions has taken a back seat, with e-procurement driving the automation of each step within the buying chain.
As predicted, e-procurement has not been a flash in the pan, far from it. From the suppliers’ perspective, customers now have an increasing variety of e-procurement choices available to them. Larger wholesalers and suppliers are offering their own e-procurement systems, presenting end users with a platform from which to place orders and process invoices. Wholesalers like Brakes have taken this a step further, teaming up with food service technology specialists to provide a fully integrated range of services to reach beyond the confines of the customer’s shopping basket. Working hand-in-hand with Brakes’ own e-procurement platform, IndiCater’s online stock, recipe, menu, nutrition and allergy management tools can now be seamlessly linked together, providing a one-stop-shop for supporting Brakes’ customers during every step of the procurement process.
From a customer’s perspective, the evolution of changes that have taken place in the e-procurement arena offer exciting new choices. E-procurement was originally seen as complex and expensive to set up, unpopular with both suppliers and customers who lacked the necessary technology. Today the demands of an operational landscape require together management controls. Operators both large and small are increasingly engaged with e-procurement, replacing out-dated manual processes.
They are doing this using a variety of routes – from setting up their own platforms, engaging procurement consultants, or via suppliers themselves. At IndiCater, 60% of our software enquiries are focused on e-procurement and its associated tools.
The software is simple to use; suppliers can upload and update catalogues at a click, whilst customers can accurately manage and control stock. Over the last three years, we have seen the number of suppliers working with IndiCater treble to over 750. This has been driven by an increasing number of customers putting pressure on their suppliers, remaining competitive and up to date, and a realisation by suppliers and customers alike that e-procurement is not, in fact, a ‘dark art’.
As technology has evolved, so has the procurement specialist’s job role. Historically they have negotiated with suppliers, captured catalogue and pricing data, matched chefs’ needs to products and pricing, and communicated pricing information to the finance team. Some elements of the role have now been effectively replaced by software, whilst others have been enhanced. Shifts in the role have meant that there is more time available to focus on product sourcing and negotiating, alongside access to exceptionally detailed buying data. Specialists have also had to broaden their knowledge of procurement technology.
Looking back, I was correct in my assumption that e-procurement would change the operating landscape for the long term. However, where e-procurement was until recently seen as a pioneering but complex technology, it is now well established, easy to set up and increasingly used by suppliers and customers alike.