E-Procurement provides cost savings plus improved company performance.
Traditionally the role of the purchasing manager has focused on cost containment, which makes sense since spending on purchased goods and services can represent up to 70% of a company’s cost of doing business. However, the opportunities for the role of the procurement manager are much greater than simply saving money – having a broader view of procurement can contribute much more to the overall health and growth of an organization.
Many articles on E-Procurement have focused on cost savings as the primary benefit of an automated procurement process. A Google search on “E-Procurement cost savings” returns almost 1.2 million results, with most using similar phraseology in defining the benefit of E-Procurement as “improved cost savings”.
Focusing on cost savings alone misses many of the other advantages that an E-Procurement platform can provide an organization. When companies think beyond just a transactional role for procurement, they can make better decisions at a faster pace that will ultimately increase a company’s overall business performance.
E-Procurement increases productivity through efficient record-keeping and real-time snapshots of your purchasing process.
Traditionally, manual systems have operated on manual data entry from hardcopy documents. This method is tremendously time-consuming and redundant for employees across all departments within the procurement process. According to Forrester, the accounting departments of most companies spend more than 25% of their time resolving errors (such as invoices that do not refer to a PO or misalignment on the quantity and/or the price).
With an easy-to-use automated purchasing software program, a company can keep all current and historical records up-to-date at all times. This allows managers to assess company performance instantly and make faster decisions that subsequently provide more accuracy throughout the sourcing and invoicing process.