Date of train employees
If you decide to move forward with an e-procurement project, the
most important issue of all is to ensure the support and agreement
of all key decision makers within your company.
Your strategic decisions must be clearly communicated to your staff
in order to avoid confusion and uncertainties. Many times, senior
management will implement an e-procurement strategy in consultation
with web designers and a few key staff members, leaving others to
wonder how 'going e' will affect them.
Without this information, often staff will reluctantly accept the
new e-procurement initiative but remain concerned that this new technology
will take away their job due to increased efficiencies from technology.
Therefore, your management decisions should be disclosed in an open
manner to allow staff to adjust to possible changes, and to illustrate
how responsibilities and duties may change, but they will be an integral
part of your workforce.
Think of how secretaries are initially threatened by the introduction
of computers (most people now do their own typing), voicemail (most
people now answer their own phones), facsimile machines (a reduced
need to prepare and send mailed letters), online customer service
(customer call centers are being replaced by automated response systems),
and e-mail (most people now send and electronically file their own
correspondence). And yet, secretaries are a more integrated
and value part of the administrative team than ever before.
This type of supportive message should be communicated to your staff.
The message is that technology will not replace your staff.
It will only make them more efficient, effective, increase their skills,
and increase their responsibilities.
It is important to note that a well-defined strategic business plan
in the e-procurement age must remain flexible to incorporate new,
unplanned-for markets that were discovered by exposure on the Internet.
For example, you may list your services on an international e-procurement
marketplace, also known as an industry portal. Chances are you
will receive inquiries from customers you did not target or even knew
existed. Remaining flexible and nimble to incorporate them into
your strategy allows for smoother growth and expansion.
Basic E-Procurement Strategy
Following is an outline of a basic e-procurement strategy:
Executive Summary. Brief statement of the products manufactured,
what makes the firm successful, advantages over competitors, and goals
for the next five years. State what makes your business
better than competitors that already have a presence on the Internet.
History of the Company. Date founded, revenue and profit
history, growth and contraction of number of employees, product diversification
as the company expanded, successes, challenges etc. Explain
how and when the company adopted its Internet presence and how it
changed over time. Explains successes, frustrations, and expectations
for future e-procurement opportunities.
Current Company Profile. Summary of products manufactured,
organization chart or “organigram”, number of current customers, revenue
and profits last year, major projects achieved last year, and planned
for the next five years. Include how staff responsibilities have
changed now that you have an e-procurement strategy. State
how you plan to use the Internet to change the company, how
customer interactions will change, and how efficiencies will be created..
Prospects for Growth. Competitive advantages (why is the
product unique?), competitive challenges (what could threaten the
profitability of the company?), and competitive opportunities (what
are the factors that could increase the growth of the company?). Identify
the products that will sell well over the Internet and give
the reasons why. State also why you expect growth from
having an online presence.
Industry Trends. Describe the opportunities for e-procurement
in your industry. How has Internet and ICT changed your
industry? What are the expected trends in your industry for e-procurement?
Customers. Who are they, where are they located, and why
did you select them? What is the profile of new customers who you
would like to have? Ask customers what they need from you in
terms of Internet, your web site, and integration of information and
communication technology. Why do you believe they will purchase
from you over the Internet?
Competition. Who are your main competitors and why are they
considered competitors (e.g., better product, bigger market share,
found in more countries, greater name recognition)? List the
websites of major and minor competitors. What is the estimated market
share of each competitor? Are they increasing market share
from having an online procurement strategy and web site?
Management and Staff. Profiles of company president ⁄
CEO and its directors, and a sample of rising stars within the company.
Illustrate their experience and background in e-procurement system
design, ICT, marketing, and online sales.
Marketing Strategy. Summary of direct mail, print, radio,
television, telephone cold calling or on-site visits, trade show,
e-mail, Internet, or other -ms of advertising and marketing planned,
and summary of in what countries or regions the marketing campaign
will take place. Show how you intend to attract online customers,
importers, agents, distributors, and how their interest in e-procurement
will be sustained? How can you convince them to buy from you online?
Pricing Strategy. Summary of pricing strategies for your
target markets in comparison to the competition. Will the product
be priced high or low? Why? Explain your pricing strategy for selling
and buying online? Will your prices be different from “offline” sales?
Distribution. Who will handle the distribution and shipping
of the product? How will new ICT and integrated systems
change previous distribution systems?
Customer Service. Summary of after-sales service plans,
establishment of customer service center, and overall plans to keep
the customer satisfied. How will new ICT and integrated customer
management information systems change or improve your service to customers?
Manufacturing Plan. Number of units to be produced, source
of materials, location of manufacturing sites, and the challenges,
changes, and risks foreseen as a result of your new e-procurement
strategy.
Financial Projections. Cash flow or annual total revenue
anticipated against total costs or budgeted expenses as a result
of your new e-procurement strategy.
Budget. Total annual cost of operation including personnel,
rent, equipment, billing system, printing, marketing, travel, etc.
as a result of your new e-procurement strategy.
Balance Sheet. Current liquidity and cash position.
Break-Even Analysis. Total number of units to be sold to
make neither a profit nor loss.
Source of Financing. From where will adequate financing
come to sustain the business?
Distribution of Profit ⁄ Expansion Plans. Summary
of where profits are planned to be distributed for company expansion.
