Assessing the impact of e-Procurement strategies through the use of business process modelling and simulation techniques

Abstract

In the last years, a strong disillusion has heavily affected many companies in the implementation of business to business (B2B) applications. These drawbacks are mainly due to the rushing adoption and acquisition of these new systems, believing that they would have acted as tools for automating processes, rather than real opportunities for modifying the business strategy. Their added value can be negligible and, paradoxically, negative, if not accompanied by a thorough revision of the decision-making activities and of the roles performed by the involved actors. Focusing on e-Procurement systems, this paper intends to demonstrate how the adoption of rigorous business process simulation methodologies enables analysts to properly map current and future processes and to evaluate the expected pay-offs resulting from the re-engineering activity. The paper analyses at first the main issues deriving from the new strategic role of the purchasing function. Then, it provides a literature review of the main business process modelling and simulation techniques, pointing out their role in e-Procurement projects. Finally, it introduces an industrial application experienced in a multinational pharmaceutical company and motivates how the use of business process simulation methodologies effectively supported the re-engineering process of the procurement division and the evaluation a priori of different possible solutions.