#procurement kenya

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Benefits of Vendor Due Diligence Service

Vendor due diligence is an in-depth financial statement on the financial situation of a company or an organization that is selling part or all of its company. Many renowned consultancies offer vendor due diligence to give financial information and assertion, to both the probable buyers and the seller.

The seller instills confidence that he is selling at a reasonable price. The potential purchaser gets some declaration as to the financial situation or probable financial problems of the target company. Vendor due diligence strives for covering issues and queries that might be of interest and relevant for a potential buy out or merger and acquisition.

Many buyers do not trust entirely upon vendor due diligence but use it as their own due diligence. Apparently, the credentials of the company giving this service are taken into consideration.

 Why due diligence is done?

It is often done when acquiring a business but there are many other circumstances in which due diligence might be necessary as well and is required. Due diligence defends both parties but primarily the buyer. It uncovers the liabilities which are potential and financial issues and make sure that everything is transparent instead of hidden.

 Why is vendor due diligence important?

Procurement in Kenya decreases costs while procuring items needed for a company. Vendor due diligence is important in financial institutions. It reduces threats to the operations of the business and enhances financial security. Moreover, diligence also decreases compliance and reputation risks. There is a need to conduct reviews for vendor due diligence at specific points in the business association.

 What are the types of due diligence?

There are three main types of due diligence: legal, financial and commercial. Although these have conventionally been different, the best due diligence programs sustain a section of close collaboration as the effort in one area can often notify the checks being conducted elsewhere.

Legal

Legal due diligence analyses the legal basis of a transaction, for instance, to make sure that a target business holds intellectual property rights that are critical to the future growth of the company or an organization.

 Financial

Financial due diligence focuses on validating the financial information provided and to evaluate the basic performance of the business.

 Commercial

Commercial due diligence takes into account the market in which a business operates, for example, linking conversations with customers, evaluation of competitors and analysis of the expectations that may be achieved through the business plan. This is envisioned to define whether the business plan is in alignment with the realities of the market.

 What is a due diligence checklist?

A due diligence checklist is a systematic way of analyzing a company that is being taken over or acquired through sale, merger, or another means. A due diligence checklist is also used to prepare an audited financial statement or annual report. One can get to know about the assets, liabilities, contracts, benefits, and potential problems of the company by following this checklist.

Benefits by taking on vendor due diligence

There are various benefits for the companies that take on due diligence. It helps in:

  providing information to the selling company about threatening problems related to the sale and giving them enough time to address these.

identifying problems that may end up in negotiating issues and enabling these to be canceled wherever possible.

identifying unknown areas of value.

identifying other ways of figuring out the business that may be more profitable.

identifying means of disposing of the company that is more tax beneficial.

providing some degree of control over the financial issues of the selling company which are revealed in the preliminary stages of the sale of the auction. Commercially sensitive information should not be unveiled to potential competitors.

speeding up the processes of the initial sales.

providing key information to potential buyers.

aiding potential buyers with their own validation process

helping multiple potential buyers acquire similar information, putting them all on a common platform.

helping in faster bidding as potential buyers have access to more information.

denying multiple buyers requesting similar queries.

providing an unbiased financial review of the company for sale to the potential buyers

Conclusion

Tendering is a procedure in which corporate tenders are invited for big projects that are submitted within the stipulated time frame in a tendering process. As it is quite evident from the above, that there are a substantial number of benefits to undertaking a vendor due diligence within the sale of a company. The only probable disadvantage is that the potential buyers will not have enough trust in the consequential report, but this is rapidly disproved by the use of one of the many renowned consultancies that seem to be competing to be chosen for performing due diligence service.

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Managing Your Bid Process Effectively in Procurement System

Proficiency is key for procuring professionals. There are several means to enhance the procurement process. Procuring professionals are always full of activity. There are various aspects that make it necessary to restructure processes to take full advantage of efficiency as the procuring officials are managing numerous projects and coordinating across departments. Mentioned below are some of the qualities that will help improve one’s procurement efficiency and ensure quicker, smarter, and more fruitful work.

 Be careful before purchasing

Procurement in Kenya decreases costs while procuring items needed for a company. A survey should be carried out to analyze what is being used and coordinating with whosoever is consuming those products. This keeps the company achieving new horizons. Contracts are major part of the procurement process, hence a simple and comprehensive system should be in effect to generate and assess orders. This makes the whole process easier once the decision for purchasing is made, and examines contracts and ensures all orders are the latest.

Buildingvirtuous supplier relationships

One of the main mechanisms of a procuring professional is being bordered by a group of reliable suppliers. Building and preserving good supplier relationships simplifies the procuring process and removes the need to initiate from scratch on every bid request.

Expanding network

It may seem easiest just to hold the responsibility for various projects and not involve other teams, but working competently means linking key stakeholders. Involvement from other departments extends the perspective on good suppliers, quality, and drives projects to conclude at a faster pace. Maintaining close relationships throughout an organization speeds up processes, builds confidence and increases productivity.

Involving other people is easier than ever before with so many new tools for communication. Both parties, internal and external, need access to any agreements that are created for orders, and having a policy in place that allows everyone to communicate at a single place which in turn source will prompt the process and make sure all the right people are included.

Analytical skills for right decisions

Analytical skills are required for project planning, examining vendors and bids, and discussing the best deals in the process of procurement.

Refining negotiating skills

Negotiations are part of developing good relationships. It is very easy to make the best deal for a company by keeping suppliers happy, but at the same time devising strategies to make both parties happy is crucial to becoming competent.

Negotiations always involve an agreement. Previously, this meant emailing or even mailing documents to and fro which often mixed up conversations that could lead to misunderstanding as different people were involved in different email threads or conversations and at different times. Executing a contract management policy makes the negotiation part very simple as everyone is now able to redline, edit, and comment in one place and at one go.

Thinking globally

We are living in a global economy. The best deals of the businesses are in diverse locations. Enhancing relationships with global companions increases flexibility and preferences for an organization. Global supply chains give more choices and best prices than restrictive the search to nearby locations.

Timing is an important part of thinking globally. A company needs at the earliest, and dealers want to get a contract signed as soon as possible. The process slows down if teams are emailing documents from side to side and all parties are not having instant access. A contract lifecycle management policy confirms that all the required parties are having access as soon as the agreement is generated so that signatures are penned down.

Moving ahead with technology

Making the process digitized is one of the fastest means to enhance efficiency and become successful. Various agreements and documents should be moved to the Cloud to speed up the mechanism and become a progressive company. There should be an automated contract lifecycle management policy that can help the creation of the contract creation, negotiations in real-time and automatic reminders to increase submission.

Conclusion

If the above-mentioned steps are followed, then efficacy will be maximized and procurement departments by working smoother and smarter.E-tendering in Kenya commences from the design and initiation of a purchase request or order through to the honor of a contract with stringent control.

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Difference between Direct and Indirect Procurement

The importance of procurement in Kenya has increased significantly in recent times as a key business process. It was originated as a means to integrate buying into supply chain management at a time when many big firms were struggling to accomplish their functioning costs. The activities of procurement are often divided into two distinct categories based on the consumption purposes of acquired goods and services: direct, production-related procurement and indirect, non-production-related procurement.  

 Direct Procurement

Direct procurement is the means of obtaining raw materials and goods for production. These are generally purchased from a group of suppliers at the best affordable cost, value, and trustworthiness. These purchases are done regularly and are essential for key business practices. If direct procurement discontinues its functioning or faces problems, firms are no longer able to produce and generate revenue. Historically, direct procurement is linked to manufacturing and originates from it.

 Indirect Procurement

Indirect procurement is the means of availing services or supplies essential to keep the day to day business ongoing. It does not add to the bottom of any business. This includes repairing equipment, purchasing office supplies or getting services. Businesses would not be able to function smoothly without indirect procurement. Indirect procurement comprises 15-27 percent of a firm’s total revenue.

The process of buying an item to generate a final invoice is named Procure to Pay whether the purchase is a case of direct or indirect procurement. It is a system that allows the entire procurement chain from recognizing suppliers to the payment of the final invoice. The term was invented by software developers as a technique to identify the system to be optimized. 

Mentioned below are the main areas of procurement where the difference between direct and indirect procurement is highlighted:

Supplier Relationship Management

Direct procurement teams devote a lot of time, effort and energy into building and maintaining connections with suppliers. In indirect procurement, the main focus lies on spend management and not the collaboration benefits of the supplier. The association with suppliers is transactional, with competitive costs being the key focus. Building a strong association with suppliers is something which indirect procurement teams can learn from their counterparts. Also, the reformation of suppliers and sharing volumes will result in better opportunities for savings.

Management of Cost

Indirect procurement, cost analysis is a much-used cost management practice. For indirect procurement, the best practice is zero budgeting. A method of drawing up the budget from scratch instead of basing it on the previous budget, it requires that every expense be justified before it is added to the budget; its aim is to reduce costs as much as possible. Both teams can learn and gain insights from applying each other’s tools to their key procurement categories.

Supervising Inventory

Indirect procurement, materials need to be kept in stock to ensure a smooth process of the production and avoid delays. On the other hand, indirect procurement is ruled by demand, i.e. purchasing is done based on the requirement, hence the accumulation and associated costs are lower. Direct procurement offers useful lessons in the best practices of inventory management, which can help the indirect procurement function hit the right balance between supply and demand activities.

Technology Usage

Indirect procurement has various, uneven requirements often made by a large number of users from an internal, the non-procurement function of an organization. During the selection of the eProcurement system, indirect procurement teams focus upon creating a simple buying practice through easy-to-use technology to streamline and simplify the process.

Firms have begun to realize that up-gradation of direct procurement technologies help in the streamlining of processes, risks cutting, quality maintenance and trimming of costs. Direct procurement allows learning from indirect procurement’s focus on user experience. For the businesses, to deploy the most effective strategy would be to invest in instinctive, end-to-end single-platform systems that both functions (direct and indirect) can use.

Setup of Organization

In most firms, direct costs are managed by centralized procurement and supply chain teams, and category managers focus on specific areas of procurement in Kenya. Indirect procurement is decentralized and managed by various internal stakeholders with sovereign budgets and procurement protocols.

A centralized setup and groups for indirect procurement will enhance efficiency and compliance and cut costs. Direct procurement teams focus on the management of soft skills that are vital in handling a large number of requirements, internal stakeholders and vendors, all of which make indirect procurement so difficult.

Summary

A proper balance of indirect and direct procurement is essential to shape a profitable business. Both go hand in hand.

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Top Trends that Shaping the Future of Procurement System

The eProcurement system is undergoing radical changes in a short time. It must be worthwhile to note that what the year 2019 has in store. Mentioned below are some of the top trends that need to be looked in the upcoming year.

1. A Digital Strategy

The year 2019 will enhance the use of technology. The organizations have to make the jump from manual to digital transformation with a proper plan in place. These need to spend in the right infrastructure, procedures, and resources with a vision that aligns with the objectives of the organization in the long term.

2. Embrace Digital Technologies

The organizations are going to focus on finding the right talent and at the same time grooming the in-house resources through specially designed training and skill development programs. Procurement professionals would need to acquire the critical skills to succeed in a digital world and to remain relevant in the market.

3. Thinking Suppliers Beyond the Price

More focus should be placed on improving work collaborations with suppliers. Suppliers have the knowledge and accessibility of all the phases in the procurement cycle to help in getting the best prices and reducing the risk proportion. This transparency will not only empower suppliers but also promote fair competition among suppliers which would ultimately contribute towards the growth of the organization.

4. Risk Management

Procurement in Kenya in the year 2019 will reach new heights when the question of minimizing the supply chain costs comes into play. It will require innovation and technology intervention to save costs wherever necessary.

5. Increasing Focus on Indirect Spending

Many organizations opt for automated financial solutions, including Procure-to-pay that would be combined with the organization’s Accounts Payable processes.

6. Rising Artificial Intelligence (AI) Systems

AI will not remain just a procurement trend in 2019 with more and more organizations adopting the same in their processes. Procurement teams will efficiently design and deliver procurement jobs with marginal human intervention.

7. Effective Change Management

In 2019, more organizations will focus on change management plan through a better focus on regular communication with employees; engage them through the process and by providing adequate training and support.

Procurement Excellence

Cost and innovation pressure is often revealed in the procurement process. Companies are required to set up procurement organizations or bring into line their procurement policies towards the growing needs. Companies should ensure that the procurement process is enhanced successfully.

Right Response

Procurement professionals and teams should search for the right kind of response to each trend. Big companies with a well-planned setup should consider three factors to ensure that procurement is optimized successfully:

· First, procurement and other areas should work together and strive for the same goals.

· Second, measures should be taken to ensure that costs are reduced in a lasting manner.

· Finally, parameters of success should be monitored and actions are fully implemented.

Future Trends

No one can forecast the future with 100 percent accuracy. If we can look at the present and the past trends to view, it can be very well seen that risk has also increased with the enhancement in knowledge. We have also seen that our global economy is more genuine than many would like to acknowledge.

Conclusion

The future of procurement is all about aptitude. Cognitive technologies are the key to unraveling its potential. As procurement is gaining significance within an organization, the expectations are also increasing. This year, the procurement function will scale up heights and continue to provide traditional cost savings while focusing on digital technologies and supplier synergies. The year 2019 will be full of challenges and opportunities for the procurement to undertake.

Summary

The procurement system is going to play a more considerable role in cost-cutting, sourcing, information, supplier/vendor management, regulation, and sustainability. There will be several firms involved in the outsourcing of procurement in the coming years. The incredible market need will continue to flourish as it has achieved during the last 27 years!

The organizations should focus on creating partnerships with those who modify, listen, provide solutions appropriate to their needs, and are available on and as the need arises. This would result in a long-term association in the business.

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The functionality of the Cloud-Based Procurement Solution

The advancement in technology is changing old-style business practices by disturbing the supply markets, changing procurement patterns of the customer and adding complication to the supply chain. The procurement organizations in Kenya need to play a strategic role in purchasing.

The cloud-based e-procurement system digitizes procure-to-pay procedures with embedded mobile, social and logical proficiencies, and better-off user experience. Companies are able to build a more effective purchasing system to control the spending of employees, reducing supplier risk, and improving the cost of savings with the help of modern technology, such as built-in cooperation, embedded analytics, and a more instinctive experience of the user.

Support     for a mobile workforce: In     present times,     employees and managers use mobile phones to do their jobs. Modern cloud-based     procurement solutions enable us to control these devices to restructure     procedures and allow faster consents.

Efficient     collaboration: The role of the integrated procurement in Kenya     is to facilitate real-time authoring of the document, reviews, and approvals.     Efficient social collaboration assists teams to accomplish their tasks     quickly and more effectively.

Embedded     analytics: Interactive,     role-based containers which are called info lets help users quickly envisage high-level information, review appropriate facts and initiate action accordingly. Users can quickly decide on the way forward in a business process with the help of transactional applications that leverage embedded analytics in context.

Instinctive     user experience: A consumer-like user experience administers procurement     management compliance and makes it easier for employees to discover what     they require. This improves the productivity of the employees as they are     able to emphasize more value-added assignments.

Advantages of Cloud Procurement Software

Organizations are able to streamline the procurement process in Kenya end-to-end by using cloud procurement solutions. These solutions allow procurement businesses to systematize, abridge, install, and integrate procure-to-pay processes swiftly at a lower cost. Mentioned below are a few advantages of moving procurement software to the cloud:

1. Cost-Effective

The benefits of moving to a cloud procurement platform is the cost-effectiveness which it offers. Organizations do not need huge investments and bulky maintenance fees to opt for procurement solutions. Cloud-based e-procurement solutions offer pay-as-you-use plans that allow organizations to reorganize their procurement procedures while keeping their expenses to a minimal level. Organizations have the right and are free to separate from facilities whenever they want as there is no IT investment involved in it.

2. End-to-End Integration

Packaged procurement software is a disengaged piece of code that sty different from other existing procure-to-pay tools. Today, nearly all cloud-based procurement platforms offer combined integration competences through API integration. The cloud-based procurement solutions, through end-to-end integration capability, remove data redundancy, manual involvement, etc.

3. Easy Collaboration

A cloud-based procurement system enables a continuous flow of information throughout the organization, irrespective of role or department or location. The software makes the decision-making process speedy and reduces the overall time of the procure-to-pay cycle through quick retrieval of data and continuous association.

4. Ease-of-Use

One of the greatest advantages of automated procurement software is user-friendliness. Cloud-based procurement tools provide companies the capability to meet the demands of an evolving market. Businesses can either scale their subscription plan up or down depending on their requirements.

5. Greater Visibility

Cloud-based procurement solutions emanate with an instinctive dashboard that provides a bird’s-eye view of the procure-to-pay process. Users can track the status of any purchase at a glance by using the dashboard and progress bar. Cloud-based procurement solutions come with inbuilt reporting modules, which helps businesses solve invaluable chunks of perceptions by clicking a button. These easy-to-interpret pictorial reports are crucial in decision making, strategic planning, etc.

Conclusion

Cloud-based technology has opened up new avenues in which businesses operate. Well-Designed cloud-based e-procurement solutions provide new flexibilities that enable businesses to enrich business practices to better control business systems.

The businesses should consider taking on cloud technology as a part of their procurement policy. The technology helps design and implement price strategies, marketing campaigns, and logistic routes in a cost-effective way that not only meets the demands of customers but also a business.

The coming time will analyze the extent of how business information systems are able to support cloud-based procurement solutions. The need of the hour is to initiate an investigation to recognize more specific cloud-based procurement solutions and their pertinent factors, such as viability, significance, and appropriateness.

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Benefits of eProcurement Trends in the Global Market

If we see the trends of e-procurement over the last 20 years, it not only highlights some successes but also challenges too. The Internet has been drastically changing the way purchasing is done globally and evolved into a complex marketplace with many players offering a wide range of e-procurement and business-to-business services.   

E-procurement system incorporating various aspects of electronically-assisted buying. It includes services, such as hosting of databases, catalog management, managing tenders and auctions on behalf of clients to a complete outsourced procurement service. There is a scope of innovation and development in each service.

1. In the private sector

E-procurement system, which is hosted externally, is part of a growing trend. Some e-procurement service companies provide the full range of supply network services to support procurement transactions globally. Another e-procurement trend is where large corporations manage in-house-procurement service. Successful implementation of e-procurement is considered to be one of the most notable features of a world-class purchasing organization. To attain this, enterprise-wide software is required to be installed to manage the database and transactions.

2. In the government sector

Some governments are adopting e-procurement trends more broadly as it provides structure, audit trails and transparency of transactions. However, governments in emerging markets are often unaware of the benefits that e-procurement is providing. As per the research was done by the World Bank, it has been found that governments are reluctant to adopt a transparent system.

Some basic requirements need to be taken into consideration before an e-procurement system can reach full potential in the government. These are some of the recommendations made by the World Bank which include expansion of ICT services, ensuring a secure online setting, development of standards and procedures and trained purchasers.

3. In non-government organizations

The not-for-profit sector can avail great benefits by using electronic procurement services. E-procurement allows aid-funded buyers to compare prices swiftly and easily, to review provisions and delivery dates from suppliers worldwide. This is the area where the advantages of e-procurement cannot be ruled out.

4. Challenges and Trends

Cost and innovation pressure continue to rise across industries which are often reflected in procurement in Kenya. It does not only reduce costs but also provides innovative products at the same time. Companies are being forced to align their procurement policies toward this growing trend and demand.

Procuring and teams should frame the right responses against each of these trends. Companies with a good strategic setup should ensure the successful optimization of procurement in Kenya and for this, three factors need to be taken into account: first, procurement and other areas should strive towards the same targets; second, steps should be taken to ensure that costs are reduced in a long-term manner; and finally, evaluation and monitoring of success based on the parameters of action points.

Conclusion

To date, no one has been able to predict the future with 100 percent accuracy, but if we analyze and look at the present and the past it can be seen that not only knowledge has increased, but also a risk. It has been also seen that the global economy is more real.

There is a need to pay careful heed at the emergence of economies, increase in competition, lack of resources, deprived partners, suppliers/vendors, sourcing management, procuring departments, tightening of credit, cash flow, and other areas.

The Way Forward

Procurement in Kenya will play a more significant role in cost-cutting, sourcing, information, partner and supplier/vendor management, compliance, regulation, and sustainability. In the years to come, there will be many more companies engaged in the outsourcing of procurement as there is no extra cost of labor and based on the performance-based model in most of the cases. Therefore, the need and incredible market demand will continue to grow as it has been growing for the last 27 years.

It would be better for the companies to form a partnership with those who provide strategic solutions to problems; available on and as the need arises, and long-term association in the business.

As the procurement is beginning to play a more responsible role and capability by being more transparent, proactive with a variety of skill sets, it will perform a pre-eminent profile. The year 2019 promises to be interesting, with challenges and opportunities ahead. Strong procurement tools are not trendy and an important necessity for companies to reach new horizons.

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MTender Africa is one of the leading companies that offer supply chain risk management solutions. The company provide the best eProcurement system in Kenya fit customers' compliance. In addition, the top firm of online tenders Kenya offers an automated e-auction arrangement for corporate and government sectors.

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PROPOSAL TO ALLOW PUBLIC PROCUREMENT THROUGH A SPECIALLY PERMITTED PROCUREMENT PROCEDURE

PROPOSAL TO ALLOW PUBLIC PROCUREMENT THROUGH A SPECIALLY PERMITTED PROCUREMENT PROCEDURE

The Finance Bill 2017 seeks to amend the Public Procurement and Asset Disposal Act, 2015 (the “PPADA“) to provide for a new method of public procurement referred to as Specially Permitted Procurement. The procurement methods currently available under the PPADA include open tender, two-stage tendering, design competition, restricted tendering, direct procurement, request for quotations, electronic…

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