More often than not, buyers in the purchasing department are told specifically what software users want. Users often balk if buyers try to dictate what is best. Actually, this is no different than many other products, except that it is so time-consuming to properly evaluate and compare computer software, that it is both easier and more practical for the buyer to leave the software choice to the user.

Large companies that require hundreds or thousands of copies of software or obtain licensing for many terminals have special analysts delegated to evaluate and choose what they believe is the most suitable and cost-effective programs. The user or user department normally is consulted to determine what they need and get their agreement on any particular choice. It is a mistake if they are not consulted.

Thus, the purchasing manager and buyers may be given a choice of various software destined for use by the purchasing department. Today an estimated 80% of all purchasing operations have some type of software involved in purchasing transactions. But some of this software is now getting old and is rather inefficient. Commonly, previously installed software was an afterthought added to other major functions, such as the accounting processes.

Time To Upgrade

The purchasing manager who either has little or no purchasing function computerized, or who has not improved the software for a long time, should consider newer, more efficient programs. Depending on the size of the department, the type of purchasing being done, and the efficiency of the existing system, it is estimated that better software can reduce administrative costs from 10% to 50%.

Moreover, using the computer to its full capabilities can make negotiations easier, can provide valuable information that would otherwise be too costly to obtain, and can provide tools that make analysis of prices, cost, and supplier performance much easier and quicker.

Key Factors In Choosing Software

Whether you are upgrading your present purchasing software or establishing a system for the first time, the following are some of the areas of concern.

1. Will the software do the required basic purchasing functions? For example: Will it store terms and conditions and produce standard purchase orders as well as those that can be customized? Will it store retrievable data about each supplier, each item, and each transaction?

2. Will it produce reports about how much has been purchased by item, by categories of items, by supplier, and by buyer? Will it provide data and guidance for negotiating? Will it analyze and help analyze bids? Will it calculate the most economical order quantities?

Will it provide answers to make/buy decisions? Will it forecast prices and quantity requirements? Will it keep records of delivery dates and provide reminders for follow-up or expediting action?

3. Is the software compatible with existing hardware or hardware that is needed by other departments? In some cases, purchasing will need its own independent hardware.

4. Will the software easily share information with other programs? Can other programs easily use the data generated by the purchasing software?

5. How long will it take purchasing personnel to learn the system and how difficult will it be? Is training provided? Is there on-line help?

6. How well written is the documentation? Is it easy to understand?

7. How fast will the software be?

8. How many screens will buyers have to use to obtain information quickly? How fast will it be to move from screen to screen?

9. How much does the software cost? Are there extra charges for support?

10. How easy is it to change the programs or customize them? Can this be done in-house?

11. How long has the software been available? Are other users satisfied? Have all the bugs been worked out?

12. Is the software compatible with present forms and manual systems or will the entire purchasing system have to be changed?

13. Can the system be adapted to networks? Can certain types of information be restricted to those authorized?

14. How much computer memory is required? What is the maximum amount of data that can be used?

15. What language or languages are used for the programs? Is the source code available? How much does that cost? Will the programs conflict with any other programs being run?

The Purchasing Manager should make certain that he or she has the major input on which software is selected. The proper software is a necessary tool for maximum purchasing performance.

However, the selection cannot be made without an adequate understanding of your short-term and long-term objectives. A thorough understanding of the systems that are being considered is necessary. It takes time to learn about those systems, but it is time that must be spent for satisfactory long-term results.