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Understanding Purchasing Cards
Purchasing cards are receiving a far-reaching amount of attention in the marketplace. It seems that virtually "everyone" has heard something about it, has a pilot in process, or is planning one; and some pioneering organizations that implemented early have moved well into full deployment. For purchasing cards, it appears, the time has come.
Assessing Business Need and Implementation Issues
The single most important concept to remember in assessing a potential purchasing card program is to thoroughly understand your organization's business and mission, culture, and capabilities; and your function's aims and goals, including the methods of acquisition (formal and informal). In this regard, you should be able to answer these questions:
Beyond the Pilot Program
Once a purchasing card pilot program is operational, the next important ongoing activity is to increase card usage. Avoid the "perpetual-pilot-test" scenario wherein growth of the program never materializes and the results — organizationwide process efficiency — do not accrue because full rollout and robust use do not occur. To ensure that the purchasing card program continues to grow and be well utilized, three basic issues need to be addressed:
A Step-By-Step Guide to Implementing a Purchasing Card Program
Putting together a pilot program for purchasing cards is an operation that will result in major change. In fact, it's process reengineering, requiring careful planning and focused thought, which works most effectively when a detailed task list is drawn up and followed. This step-by-step guide can serve as a framework for your task list — all that remains is to tailor it to your organization's structure and needs.
AARON L. BILLS, C.P.M.
Aaron Bills is product manager, purchasing card with GE Capital Financial, Salt Lake City, Utah. Mr. Bills has been involved in the development and implementation of purchasing card systems since 1991, and has managed nonproduction purchasing departments where the purchasing cards were used.
Kathy Snow is president of her own consulting organization, Kathy Snow Associates, Inc., Woodlyn, Pennsylvania. Ms. Snow has hands-on experience in implementing major purchasing card systems, as well as other transaction reduction processes.
- Fortune Magazine, February 20, 1995, "Purchasing's New Muscle."
- NAPM Insights, March 1993, "All Gassed Up and Ready to Go."
- NAPM Insights, March 1994, "Purchasing Gets a New Charge."
- NAPM Insights, August 1994, "The Procurement Card: Small Dollar Purchases."
- NAPM Insights, October 1994, "Purchasers Give Credit to Cards."
- NAPM Insights, May 1995, "Staying in Charge of Your Credit-Card Program."
- "The Procurement Card," videotape of a satellite videoconference, NAPM
- "Purchasing Cards: A System and Implementation Overview," audio cassette, Master Duplicators Inc.
FOR FURTHER READING
[Note: Because the field of purchasing charge cards is relatively new, and the body of knowledge consequently in development, little written material about the subject exists at present.]
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