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Creating a Business Case for eProcurement

Procurement departments across the country are reporting that they are busier than ever with staff shortages, budget cuts, and ongoing supply chain issues. Whether it is these challenges or others that your department is facing, you may believe now is the time to find a solution that will streamline your organization’s procurement process. Based on your research, and recommendations from other agencies, you may have already decided that implementing an eProcurement marketplace is just that solution. Creating a formal business case for eProcurement is the best way to present this new initiative to achieve stakeholder approval.

What is an eProcurement business case?

According to projectmanager.com, a business case is a presentation or document that outlines why a project should be executed, and how its benefits outweigh its costs. The goal of a business case is to convince stakeholders of a project’s value, and that the project you are proposing is a sound investment in which they should direct resources. To build a business case for EqualLevel’s eProcurement system, it is important to provide higher-ups with the information they need to understand both the importance of automating, and the return on investment (ROI). 

The Five Elements of a Successful Business Case

There are many recommended formats for structuring a business case but in general, it should cover the following five elements:

1. The Challenge

In this first section of your business case, you will outline your current process and the reasons why you believe change is necessary. Challenges you might include:

  • Manual entry is slowing down the purchase process
  • Manual entry causes more errors
  • Bookkeeper burnout 
  • Maverick spend
  • Non-compliant purchasing

You should also include the costs associated with your current system in this part of the business case. These could include any costs related to software, the wages paid to employees who manually enter requisitions and purchase orders, as well as the costs associated with continuing to overpay for goods and services. 

TIP: When tallying your current costs, if there is information you are not able to find within your organization, industry benchmarks should suffice. 

2. The Solution

In this section of your business case, you will present the solution you are recommending, namely, implementing EqualLevel’s software. This will be where you define what an eProcurement system is. Here is an example: “An eProcurement marketplace is integrated with an organization’s ERP system and offers a single, seamless platform that facilitates all of the processes associated with the shop-order-pay transaction. EqualLevel’s dashboard offers a consumer shopping-like experience where users can shop from all of their organization’s approved suppliers in one place. With this set-up, best value options are displayed and organizations report higher user acceptance and greater compliance.”

This is also the part of the business case where you will present how the software works. The best way to explain the functionality and capabilities of EqualLevel’s AI-powered software is to see it in use. EqualLevel creates customized software demos so you, and your organization’s stakeholders, can see the marketplace in action. The demos allow interested parties to get hands-on experience with the system and it lets them see how EqualLevel’s Savings Advisor (ELSA) locates savings in real-time, while a user shops.

3. The Cost 

EqualLevel is able to provide a worksheet to quickly calculate the results you can reasonably expect to achieve through deployment of its eProcurement marketplace. The worksheet divides savings into two areas: “soft” savings, where process costs will be reduced (the resources may be reallocated to other, more value-added, activities), and “hard” savings, where costs will actually be reduced (using ELSA). Once you have calculated your expected savings, you can subtract that from the cost of the marketplace software to determine your ROI. 

4. The Benefits

The next section in a business case should include the benefits your organization can anticipate from implementing your initiative. In this case the benefits of an eProcurement marketplace include:

  • Efficiency: Automating leads to faster cycle times and improved productivity. The elimination of paper and manual steps frees up time for employees to focus on more critical initiatives.
  • Cost Savings: With all approved vendors housed in one centralized location, best value products can be easily identified. 
  • Compliance: By automating the three-bid process and showing only contracted vendors, an eProcurement marketplace helps organizations comply with state and federal regulations.
  • Transparency: Robust reporting capabilities help ensure purchases conform to established policies. Real-time visibility into purchasing activities discourages maverick spending and provides leadership with valuable Insights.

5. The Timeline

Generally, an eProcurement marketplace can be implemented in 60 to 90 days and often a return on investment can be achieved within a single fiscal year. EqualLevel can provide a generic timeline for implementation to present to stakeholders or an estimated timeline can be created that is tailored to your organization’s unique situation.

A well-organized and thoughtful business case could be the difference between being able to implement an eProcurement marketplace, or not. Should you need help with this process, or for more information, go to www.equallevel.com.

About the Author

April Marzzacco is a Strategic Sales Consultant for EqualLevel where she brings over 20 years of eCommerce and procurement experience to her role. Prior to EqualLevel, she served as a Business Process Analyst at the Lee County School District where she was responsible for production support, analysis, process documentation, training, and process improvement. She also worked in the district’s Procurement Department where she was instrumental in integrating both the EqualLevel marketplace and an eSourcing platform.

Further Reading

Click here to learn more about EqualLevel’s eProcurement system.

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The Benefits of Invoice Automation

Many public sector Accounts Payable departments grapple with the invoice reconciliation and approval process. It can be considered the most laborious, time-consuming, and error-prone part of the procurement cycle, especially for those organizations still relying heavily on paper and manual processes. Fortunately, advancements in technology, namely the widespread use of cloud computing and increased accessibility to eProcurement solutions, have given rise to invoice automation.

Managing invoices that are received via email, postal mail, or fax can be tedious and cumbersome. Data must be manually entered into the organization’s financial system, and the documents scanned and uploaded. One or more full-time dedicated employees are often required to enter and reconcile hundreds or thousands of invoices on a weekly basis.

EqualLevel’s eInvoicing Solution

EqualLevel’s eInvoicing solution provides a means to seamlessly and electronically exchange invoices between software systems and automate key portions of the invoice reconciliation process. With invoice automation, suppliers may generate an electronic invoice from their own system, or from a system made available by the eProcurement provider who services the buying organization. All invoices can then be sent electronically, directly to the buying organization’s eProcurement application, regardless of the supplier’s technical sophistication, greatly simplifying the process.

ERP Integration

EqualLevel’s eInvoicing solution may be integrated with an organization’s existing accounting or enterprise resource planning (ERP) system to replace an inefficient, paper-based invoice approval process with a convenient online system. The invoice reconciliation and approval process may take place within the eProcurement system, the organization’s ERP system, or in both through a two-step hybrid approach. In the hybrid approach, the eProcurement system will match the invoices and automatically reject those that violate predetermined exception rules, including but not limited to invalid invoice items, incorrect tax or shipping additions, and substantial price increases. Invoices that pass these initial rules are then transmitted to the ERP system for final reconciliation, where less critical exceptions can be routed for manual review before payment approval. Options for transmitting invoices to the ERP system will depend on the flexibility and robustness of the solution from the eProcurement provider, but some possible options include sending the invoices via cXML, pulling the invoice data via an API integration, or an automated export/import of an invoice data file.

Benefits of Invoice Automation

Automating the invoice to payment process helps organizations more easily manage the entire invoicing lifecycle. Some of the key benefits of eInvoicing include:

  • Automating invoice entry and reconciliation.
  • Receiving structured and uniform invoices.
  • Reducing data entry and document handling costs.
  • Reducing errors caused by manual data entry.
  • Monitoring transactions in real-time.
  • Slashing invoice processing times.
  • Eliminating late payment charges.
  • Taking advantage of early payment discounts.

Digitizing the invoicing process streamlines the entire workflow and frees up valuable time for financial professionals to spend on more strategic tasks.

Click here for more information regarding EqualLevel’s eInvoicing solution.

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