3 advantages of e-procurement

E procurement
September 6th, 2018
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Who does e-procurement really benefit? Buyers, purchasing departments or the company itself? Unsurprisingly, the answer is all three! Wax Digital has conducted a survey of 200 purchasing professionals to explore this question in depth. According to respondents, the advantages can be divided into three key categories: opportunistic, tactical and strategic. Let's look more closely at the concrete advantages of each one.

E-procurement: "Opportunistic" advantages

32% of people surveyed believe that e-procurement offers opportunistic benefits, namely "quick wins" and short-term benefits.  Here, it is primarily a question of direct savings on purchasing costs.

Examples include:

  • Online auctions which work both ways, with suppliers "selling off" their products and buyers posting their requirements to get the best offer.
  • Large orders from a single supplier which reduces the cost per item.
  • Control over "unscheduled" or "ad hoc" purchases which ensure that buyers benefit from conditions that have been discussed with the selected distributor.

In addition to quick wins, these examples offer buyers the opportunity to show management teams the added value that e-procurement solutions can offer. Initial returns on investment and the resulting profit margins may prompt consideration of future investments in this type of technology (e-sourcing, Procure to Pay, e-invoicing, contract management etc.).

E-procurement: "Tactical" advantages

Once again, 32% believe that e-procurement has "tactical" advantages. These include mid-term benefits such as saving time and increasing efficiency for teams, and improving productivity and fast decision making.

These advantages are mostly a result of automating processes in terms of placing orders and managing suppliers, for example. In fact, solutions can be fully adapted to a company's needs (pre-defined list of suppliers, validation workflows etc.).

According to the survey, buyers particularly value the time savings and reduction in errors, in addition to the full transparency of their company's purchasing habits.  Wax Digital expressed its surprise that purchasing departments do not place more focus on such advantages.

E-procurement: "Strategic" advantages

This area represents a major challenge for 36% of the professionals surveyed. However, e-procurement guides companies in their long-term strategies, making it the last but not least key benefit of e-procurement. Examples of this include risk management, optimisation of purchasing forecasts and the introduction of an ethical charter.

This supports the growing tendency to link purchasing and company strategies together, or even integrate purchasing directors into executive committees.

Whether they are opportunistic, tactical or strategic, the advantages of e-procurement provide a solution to individual challenges. These technologies allow companies to save money quickly, optimise existing processes and refine the company's strategy in collaboration with purchasing departments. The only thing left to do now is to identify which areas you want to optimise!