Digital Divergence: How eProcurement Can Unknowingly Fuel Alternative Spend
In the modern business arena, eProcurement systems like Ariba and Coupa have emerged as the architects of a streamlined, transparent, and efficient procurement process. They promise a realm where every purchase is a well-considered, well-documented step towards operational excellence. However, as with any change, the transition to a digital procurement platform comes with its own set of challenges, mainly stemming from old habits that die hard.
The Allure of eProcurement
The transition to eProcurement systems is akin to stepping into a well-lit, well-organized modern marketplace from a bustling, chaotic bazaar. It promises clarity, control, and convenience. The initial figures are encouraging. Maverick spending takes a nosedive, procurement processes seem to be on a leash, and a newfound transparency in organizational spend is welcomed with open arms.
The Subtle Detour
However, as the novelty wears off, a pattern emerges. The stringent controls and multiple approval layers, although necessary, start to feel like a maze to some employees. The simplicity and immediacy of old pathways like P-Cards, T&E Cards, or personal cards beckon. Slowly but surely, a detour from the modern marketplace to the old bazaar starts manifesting. It's subtle, it's gradual, but it's real.
The Unseen Divergence
The digital platform continues to showcase a controlled spend environment, but what lurks beneath is a growing divergence towards alternative purchasing channels. This shift is often unnoticed, given the spotlight on the eProcurement system’s analytics. The old bazaar is bustling again, albeit in the shadows.
The Ripple Effect
This unnoticed divergence isn’t just a deviation from modern procurement practices; it’s a leak in the procurement pipeline. The manual reconciliation of expenses from alternative channels is a step back, a time-consuming activity prone to errors. The lack of visibility into these transactions could also harbor potential fraudulent activities, a ghost from the past we thought we had left behind.
Steering Back on Track
The route to remedying this situation involves a blend of awareness, simplification, and oversight:
Analytics: Relying solely on data from your eProcurement system only reveals part of the story. Including analytics on alternative purchasing channels will provide a holistic view of organizational spend.
User Education: Continuous training and awareness programs to underline the benefits and ease of use of eProcurement systems, nudging employees back to the modern marketplace.
Process Streamlining: Evaluating and simplifying the procurement processes within eProcurement systems to ensure they are user-friendly and not a labyrinth.
Regular Audits: Routine audits to monitor compliance, identify discrepancies, and ensure that the procurement policies are evolving with the changing organizational needs.
Discover what a P-Card spend analysis can do for your organization at ProcurementIntel.com or Contact a Spend Analyst to see how we can help you uncover the hidden alleys of alternative spending and steer your organization back on the track of streamlined, compliant procurement.