Articlr

Both big and smaller enterprises's will see the advantage of having a central procurement model. Effectively a small section of individuals are responsible for the purchases of a larger group. This allows the control and audit to be effectively managed and allows compliance with issues like the SOX laws.

However, there are drawbacks as this model has the effect of pouring a large number of transactions into a tight data pipe effectively funneling and throttling the efficiency bandwidth of the purchasing department.

How to solve problem ? One wants the efficiency of a large number of people doing a large volume of transactions but with the control of a smaller group of empowered managers monitoring them.

The solution is to devise a system of controls by way of a procurement software system. Recent public exercises have shown big paybacks in rolling out Enterprise wide procurement solutions like SAP or Oracle or even Great Plains where such a system allows users, perhaps dotted globally around the globe, to enter their purchase orders but have them approved by a smaller group of line management.

Conceptually this allows the best of everything where the users are responsible for their own orders and the management thereof but the approvers can have control of the available budgets and either approve the requests or reject them back to the originators for a redo.

This closed loop method has shown to be beneficial to the bottom line and allow for serious cost reductions in annual operating expenses.