Organisations implementing the right e-procurement strategies and
technologies can reduce their purchasing costs by up to 75%,
according to a report by the Aberdeen Group.
The analyst firm said companies implementing e-procurement best
practices, such as thorough business process investigation prior to
deployment, are achieving the greatest savings.
The report, which looked at companies in Europe, the Middle East
and Africa, also cited the use of e-procurement as a revenue
generating tool, through improved supplier relationships, defined
classification standards and helping partners with logistics cost
management.
Frances Howarth, an analyst at Aberdeen Group, said strategy and
planning are vital to e-procurement success. "Technology is not a
strategy," she said. "Companies need to plan their spending, set
benchmarks, train all their users and work closely with
suppliers."
Defining how e-procurement can improve business processes will go a
long way towards helping companies to achieve savings, Howarth
said. "It is not just a matter of putting new technology on top of
existing processes. Companies need to work with suppliers to make
sure the applications do exactly what the business requires."
One of the biggest hurdles to overcome with e-procurement projects
is integration with legacy systems. "Although suppliers have
responded to the problem by building adaptors, there is still a lot
of work to do," said Howarth. "However, companies do not
necessarily have to integrate entire systems - just enough to get
the system working."
A big growth area in e-procurement is online marketplaces. Howarth
said larger companies should look at investing in these when they
are launched.
"If companies get in early they have more of a chance to shape the
markets," she said.