The Integration of Procurement And e-Infrastructure Management White Paper Introduction The effective management of technology resources is critical to gain a competitive edge in today’s world. In the new “e-world”, your company’s technology infrastructure must be aligned with the corporate strategy. And, the technology must be reliable and appropriate to support critical business processes. In order to respond to the constant changes you must minimize the time required to purchase and install new technology. Many organizations are currently using Enterprise Resource Planning (ERP) applications, such as Oracle Financials, SAP, Baan and PeopleSoft, or e-procurement systems, from vendors such as Intelisys, Ariba or Commerce One, to manage the procurement process. While these systems are highly effective in managing procurement, they are unable to fully manage the dynamic technology resources throughout the life cycle—from planning to procurement, deployment, maintenance and finally, retirement. In order to accomplish life cycle management of technology assets, organizations must fully leverage the pre-procurement and post-procurement information captured in e-infrastructure management systems. Specific tasks include: ■ ■ ■ ■ ■ ■ ■

Establishing corporate technology standards and approved catalogs. Enforcing an approval process based on corporate technology standards. Maintaining asset related contract information. Managing associated budget information. Registering new assets. Fulfilling requisitions. Managing the Installation/Move/Add/Change (IMAC) process.

The integration of a procurement process and an infrastructure management process is no longer an added benefit, but a corporate imperative.

An Overview of Procurement Applications ERP and e-procurement systems allow a company to integrate and manage important information about technology procurement. In the procurement phase of the life cycle, these applications are valuable tools

“Procurement professionals must match

for completing a technology asset order and tracking the financial value of the purchased asset. Specifically, organizations can:

technology with business

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needs, determine the

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right deal and financial

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structure, negotiate

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diligently, and

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Select items to buy from preferred suppliers. Create a purchase order and send it directly to the supplier or route it internally for approval. Order goods and services directly and electronically from suppliers. Track purchase requests through the approval process. Record the receipt of the goods or services. Integrate purchasing with accounting or enterprise systems.

consistently monitor vendor performance, while reducing IT costs”. Beate Hohmann, “International Procurement: The Step From Childhood to Adolescence” presentation, GartnerGroup IT Asset Management Conference, Paris, May 15th

Corporate technology assets are being acquired to satisfy a variety of business needs. Distinct asset characteristics (and therefore associated problems) need to be managed when a procurement event is set in motion. However, asset distinctions and asset characteristics are identified during pre-procurement events such as the establishment of technology standards, negotiation and establishment of supplier contracts and associated financial budgets. It is during the pre-procurement process, that asset managers and technology managers can better plan the next generation set of assets, which propel the business towards its organizational goals. It is the asset/technology manager’s responsibility to create technology standards and technology rollout plans/policies, which align the infrastructure with business goals. The result, therefore, is no longer an independent procurement event but one which is based on corporate technology standards, based on pre-negotiated contracts, and based on corporate budget plans. In addition, once an asset is installed, procurement software does not track the constant changes that occur in the dynamic corporate technology environment. As a result, implementing a procurement solution without effective infrastructure management will result in financials that do not reflect an accurate value for upgraded equipment and decisions that are based on outdated information.

The Added Value of e-Infrastructure Management Solutions The procurement event is just one step in the chain of events that must occur to satisfy the business requirement. The steps are complex and include establishing technology policies/standards and budgets, negotiating and maintaining vendor contracts, procuring the assets, and ongoing management of assets once they have been procured. Specialized e-infrastructure management products can be used to complete the various phases of the technology asset life cycle to supplement online procurement systems. The following diagram illustrates the various phases of the technology management life cycle.

Technology Life Cycle Management e-infrastructure management solutions provide additional details about technology resources to enhance the information tracked by ERP and e- procurement applications. With more comprehensive information about the e-infrastructure, companies are able to make more effective decisions regarding the deployment, depreciation and upgrading of their technology resources. Specific benefits of integrating procurement and e-infrastructure management solutions include: ■

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Procure from an established set of technology standards (catalogs) and enforce corporate policies. • Adoption of a standard requisition process allows a well-organized set of business rules to govern the typically chaotic request for technology in an organization. Threshold parameters can be established to dictate approval routing among business units and among authorized approvers. Furthermore, it forces the general population to select pre-approved technology assets from welldefined and established catalogs.

• The standard requisition process also enables organizations to establish Service Level Agreements (SLAs) against requisition fulfillment. Based on the information provided by the pre-procurement and procurement process, asset managers and deployment managers can better plan and execute against user specific service level agreements. ■

Capture and retain asset related contract information, including associated budget information. The exercise of negotiating and establishing vendor/supplier contracts forces the organization to examine technological standards and financial budgets. The information gathered during this process is registered and stored in an asset management system. The resulting benefits are: • Improve ability to monitor vendor compliance with contract prices. • Improve planning and decision-making ability with access to thorough information. • Leverage volume purchasing power.

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Establish life cycle management of technology assets. • Complete the registration process for the asset. Once an asset is registered in the asset management system, the ongoing management process can continue. Asset managers benefit from having access to the entire historical data for each corporate asset (budget, contract, vendor, requisition, etc.) in the enterprise technology repository. Contract managers benefit by having immediate access to information on contract/lease expiration date, asset configuration, asset location, user, and business unit to enable quick decision making. • Immediate access to requisition information allows fulfillment managers to make fast decisions regarding whether to fulfill a request from stock or via a procurement event. With status information from a procurement event, the fulfillment manager can better adjust plans to meet SLAs against the specific business requisition. In addition, access to up-to-date inventory stock levels and procurement status reports for equipment enables monitoring and reporting against inventory replenishing plans. • Automatic data feeds from procurement events into an asset management system are critical to support ongoing management of assets. As a result, asset managers, help desk support operators, financial managers, contract managers, and other role players in the organization can track, reconfigure, reassign, re-deploy, fix, and dispose of the assets per corporate approved asset management practices.

How MainControl Can Help MainControl’s MC/EMpower i.series™, features an Internet-centric suite of software solutions that provide customers with a true life cycle approach to e-infrastructure management—from planning to procurement, deployment, maintenance and finally, retirement. The i.series is a valuable complement to today’s ERP and e-procurement tools in order to improve productivity, increase the accuracy of information, and reduce expenses.

“[An automated procurement] process

Using MainControl, in conjunction with an online procurement solution, you can e-procure from supply chain participants, as well as from inventory and stock levels internal to the enterprise. End users in your enterprise can perform all necessary tasks for efficient procurement on-line, including bid preparation, catalog management, requisition review, order processing, order tracking, and receiving functions. MainControl enables you to ensure compliance of procurement procedures with all corporate standards and regulatory requirements.

will involve procurement and selected suppliers and users, and it will feed critical IT asset management and financial systems to

MainControl empowers your users to participate in the procurement experience via a user friendly web interface, thereby improving service levels and streamlining corporate processes. Authorized users can enter requisitions and check on their status from anywhere in the world using any familiar browser and Internet/Intranet access. Authorized users throughout your organization can quickly and easily request the tools they need to improve their productivity. And, you can set up standard profiles for a particular type of user so that ordering in accordance with business policies is quick and easy. With integration between the i.series and procurement solutions, you will be able to track the constant changes that occur to the technology resources over the life cycle. Specific benefits include:

provide decision support”. Nicolai Ohm, “Asset Management Tools in the Real World” presentation, GartnerGroup IT Asset Management Conference, Paris, May 15th

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Gain Access to More Thorough Information. The i.series helps organizations build a comprehensive, accurate, up-to-date technology repository, which includes all relevant information on the e-infrastructure, including the physical technology inventory, what assets are required/authorized, asset values, contract specifications, ordering and procurement information. The repository includes information on each technology asset’s relationship with the user and corporate community. In addition, all IMACs are recorded and monitored. With this information an organization can ensure that its technology asset values are updated as changes are made to the asset, which will improve the accuracy of corporate financial records. In addition, an organization will be able to more accurately project the required budget and resources for new technology and application initiatives.

Validate that the Actual Technology Inventory Matches Corporate Requirements. The i.series provides detailed information on both the planned assets (i.e. what was ordered) and the actual technology inventory. Because the procurement information and auto-discovered inventory are both tracked at the component level, it is possible to perform a reconciliation of the “business” world (which provides information on associated financial, contract and ordering information) with the “systems” world. This unique feature, in conjunction with the complete asset history, enables organizations to ensure that technology assets actually implemented match corporate requirements, improve the accuracy of corporate financial records, improve service levels to users and enable better planning for technology upgrades and compliance projects.

Streamline Business Processes. The i.series also provides a complete set of specialized technology management applications including: technology planning, procurement, contract and financial management, service management, inventory tracking and change tracking. Integrating the i.series processes and information with ERP and e-procurement applications will provide significant productivity improvements. As new technology assets are required, the online procurement system can be used to generate a purchase order electronically for a technology asset using a standard hardware and software configuration. This standard is based on the employee’s job description, which is recorded within the user profiles in the enterprise repository. When the technology assets are delivered, the i.series can automatically collect the hardware and software configuration data and compare the authorized assets with the actual assets delivered. This automatic reconciliation process enables the Purchasing Manager to ensure that the equipment delivered meets the specifications of the order. In addition, an organization can ensure that its technology asset values are updated as changes are made to the asset, which will improve the accuracy of corporate financial records.

Summary In order to respond to the constant changes in today’s fast moving business environment, you must minimize the time required to purchase and install new technology. An online procurement solution provides comprehensive management of corporate technology, from the inception of the new order or requisition through the installation and user acceptance of the product. MainControl adds to this the ability to automatically monitor and manage the assets throughout the entire life cycle, enabling lower costs for hardware, software and administration of technology assets, more informed decisions, increased personnel productivity, more efficient supply chains, reduced back-office processing costs, and quicker response to changing technology demands. Copyright 2000 MainControl, Inc. All rights reserved. MainControl is a registered trademark and MC/EMpower i.series is a trademark of MainControl, Inc. All other trademarks and registered trademarks are the properties of their respective owners.

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