A new survey of 200 procurement professionals by ITProPortal has found that eProcurement technology is facilitating procurement transformation and delivering three core benefits. Spanning short- and long-term timeframes, these are tactical, opportunistic and strategic.
The recent research was undertaken by the professional services and accountancy giant Deloitte. It found that many businesses from a broad range of sectors were already benefitting from the technology, achieving significant cost reduction through its advanced spend analytics and slashing time consumed on manual tasks.
In the ITProPortal poll, the procurement professionals that were surveyed said that 32% of the benefits they had secured through eProcurement tech were “opportunistic”. These included fast, short-term gains like eAuction-based cost negotiations in competitive spend categories. Immediate savings were also made through supplier cost reduction. However, procurement professionals were also using the technology to group spending with the same supplier to achieve additional cost reductions per item, thanks to their enhanced purchasing power. The advantages of these opportunistic benefits were so apparent that professionals felt that they could justify a case for further investment to senior management.
Another 32% of the benefits delivered by the tech were categorised as “tactical”, and included “bread and butter” issues that were improved by the shift from manual to automated management. These included more compliant processes, swifter decision-making, enhanced productivity, faster supplier on-boarding and fewer invoicing errors. Other tactical benefits included automated tendering and contract management processes that drastically shortened purchasing cycles. Respondents especially liked the reduction in invoicing errors as this improved supply relationship management by preventing late payments to suppliers. The professionals who were polled saw these tactical gains as the bedrock of the eProcurement implementation, delivering greater visibility on what is spent and helping to slash unnecessary overheads.
The largest share (37%) of the benefits fell into the “strategic” category, as they were more concerned with fortifying an organisation’s future development and strengthening the success of the business. The tech improved risk management, business forecasting and helped align the supplier base with new growth strategies.
Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.