Companies are now consciously questioning the return on investment resulting from e-procurement. The extensive experience of stakeholders, sufficient distance from initial projects and the quality of procedures allows editors and project leaders to promote their approaches in a much more convincing and documented manner than in the past.
The Wax Digital study, which surveyed 200 British Purchasing Directors, confirms the legitimacy of e-procurement by accurately quantifying its ROI. The ROI has been calculated at 720%, representing a return of more than seven euro for every euro invested.
E-procurement: a 720% ROI!
Study participants estimate that for every 10 euro invested in the digitalisation of purchases, the average return on investment is 72 euro. More precisely, the 200 users surveyed on the basis of their real-world experience consider that an investment of 10 euro saves 38 euro in purchasing and 34 euro in processes. Although this is an average, taken at a specific time and in a specific context, the difference is great enough to give the Wax Digital study the prominence it deserves in promoting more effective buying strategies. As regularly stated by the editors, users are now measuring the ROI resulting from e-procurement.
E-procurement: An ROI that benefits the entire company
The credibility of the Wax Digital study is strengthened by the extensive experience of the professionals surveyed, who in particular demonstrate an exceptionally clear vision of their objectives, grouped into strategic, opportunistic and tactical categories. The improvement of purchasing results is only seen as a way to grow the company, not as an end in itself.
When a Source-to-Pay solution promotes the discovery of opportunities, accelerates the automation of minimal added value tasks and improves negotiation practices, it can only reduce spending. A large proportion of respondents to the study consider this result to be a lever which can benefit the entire company. This increase in productivity, which happens very quickly according to the Wax Digital Study, is reinvested in management and strategy.
E-procurement: The next ROI will stem from the integration of tools
While the study lists 10 key functions which contribute to improving the buying process, respondents insist first and foremost on the importance of integrating and developing a unique purchasing information system. The preference for an integrated digital purchasing platform increased by 71% in comparison to 2016.
The proliferation of poorly connected tools dedicated to a single process is no longer on the agenda. The future is about interoperable purchasing tools, and it is unlikely that this will be any different for the United Kingdom. There is still a long way to go, however this could be seen as the second piece of good news from the Wax Digital study. There are still targets to be met and purchasing productivity to be gained. In spite of the ROI given, 32% of respondents do not have an online sourcing application. 40% do not have a document management system for contracts and 43% do not use a Procure-to-Pay solution, while 47% lack an effective electronic invoice management system.
One key point tempers the praise of this technology: As promising and effective as they are, e-procurement solutions are simply tools. The results will only live up to expectations, especially in the long term, if teams have the ability to implement the solutions and if management can use their leadership capacity to give the transformation meaning and coherence.
