E-procurement tools through the Ariba Buyer system play a big role in the process. For example, users who need a PC can select one online and requisition it. Depending on the business rules governing authority threshold, the user may need a supervisor’s authorization and may need higher-level approval as well. If the spend goes into the capital range, there is another set of approval rules to ensure that people who oversee capital purchases also approve it. It also draws on the business rules from the IT group, which may be a different set of rules. Business rules are established within Ariba Buyer depending on the category of spend taking place. The types of controls made on purchases will vary. Once those approvals are completed, it releases out to the supplier. In Ariba, users have an online catalogue for contracts that are in place; several thousand office supplies are set up on the catalogue. Requisitioners can find what they want, and once submitted, the requisition is bounced against a purchase approval policy. Requisitioners can also use an RFP before they initiate the sourcing process. One of the first things they will do is get a handle on accounts payable information using Ariba to identify the largest suppliers and establish prior sales to FedEx with information on line items. Ariba Buyer also tracks receipts. Because FedEx receives products and services at many different locations around the globe, all employees have an obligation to enter a receipt into the system when the shipment arrives or the service is performed, which generates an acknowledgment and a matching invoice on the system. If an individual does not receive the product or service, Ariba will develop e-mail reminders that will eventually escalate to senior management if left unattended. The value of using a single e-procurement system is that if FedEx supply management decides to implement a change on the control levels, it is easy to do across the company using the system. For example, if the CEO mandates a spending freeze (no PCs without VP-level approval), SCM can change the business rules on the system. FedEx also uses ELAMS, another information system for temp labor contract programmers. The ELAMS system allows online requisitions for contract programmers or temp labor based on contracts that are in place—it controls the rate and type of individual sent out by that company and can approve the invoices online. It can also ensure that the skill level of temp labor FedEx is paying for is matched to the skill level of the individual actually doing the work. This enables FedEx to control the type of person that it actually pays for, delivering both value and cost savings to the bottom line. This example illustrates that improving the purchasing process in terms of efficiency and effectiveness requires more than one single system or approach. Purchasing, accounts payable, user groups or departments, and those responsible for handling inventory and material can all benefit from a systematic approach to improving how goods and services flow into an organization. Questions: 1. What types of controls can be used as a result of e-procurement in the sourcing process? 2.What do you think are the challenges associated with implementing e- procurement in this example? Each of the above answers should be between 160 and 180 words
E-procurement tools through the Ariba Buyer system play a big role in the process. For example, users who need a PC can select one online and requisition it. Depending on the business rules governing authority threshold, the user may need a supervisor’s authorization and may need higher-level approval as well. If the spend goes into the capital range, there is another set of approval rules to ensure that people who oversee capital purchases also approve it. It also draws on the business rules from the IT group, which may be a different set of rules. Business rules are established within Ariba Buyer depending on the category of spend taking place. The types of controls made on purchases will vary. Once those approvals are completed, it releases out to the supplier.
In Ariba, users have an online catalogue for contracts that are in place; several thousand office supplies are set up on the catalogue. Requisitioners can find what they want, and once submitted, the requisition is bounced against a purchase approval policy. Requisitioners can also use an RFP before they initiate the
sourcing process. One of the first things they will do is get a handle on accounts payable information using Ariba to identify the largest suppliers and establish prior sales to FedEx with information on line items. Ariba Buyer also tracks receipts. Because FedEx receives products and services at many different locations around the globe, all employees have an obligation to enter a receipt into the system when the shipment arrives or the service is performed, which generates an acknowledgment and a matching invoice on the system. If an individual does not receive the product or service, Ariba will develop e-mail reminders that will eventually escalate to senior management if left unattended.
The value of using a single e-procurement system is that if FedEx supply management decides to implement a change on the control levels, it is easy to do across the company using the system. For example, if the CEO mandates a spending freeze (no PCs without VP-level approval), SCM can change the business rules on the system. FedEx also uses ELAMS, another information system for temp labor contract programmers. The ELAMS system allows online requisitions for contract programmers or temp labor based on contracts that are in place—it controls the rate and type of individual sent out by that company and can approve the invoices online. It can also ensure that the skill level of temp labor FedEx is paying for is matched to the skill level of the individual actually doing the work. This enables FedEx to control the type of person that it actually pays for, delivering both value and cost savings to the bottom line. This example illustrates that improving the purchasing process in terms of efficiency and effectiveness requires more than one single system or approach. Purchasing, accounts payable, user groups or departments, and those responsible for handling inventory and material can all benefit from a systematic approach to improving how goods and services flow into an organization.
Questions:
1. What types of controls can be used as a result of e-procurement in the sourcing process?
2.What do you think are the challenges associated with implementing e- procurement in this example?
- Each of the above answers should be between 160 and 180 words
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
