E Procurement – A Money Saving Factor

Abstract

An average organization spends 40 per cent of purchasing expenditure on non-production (indirect goods) items like travel, office supplies and services. Optimal supply chain collaboration requires streamlined, collaborative business processes and a supporting technology  infrastructure that enables synchronization of information across the extended enterprise. As they strive for competitive advantage, today’s organizations are increasingly reliant on deeper, more complex  interactions with their business partners. While e Procurement can deliver significant ‘buy-side’ cost savings to business, a number of innovative companies, and marketplaces, are now looking at other appropriate areas of their business to drive forward their business performance throughout the value chain - both supply and demand. Automating the purchase of goods and services through implementing an e procurement system, organizations can make significant reductions on purchasing expenditures that boost the bottom line though significant hard dollar savings. This paper explains why an e procurement implementation, as part of a total supply management strategy, is an opportunity for organizations to strengthen existing supplier relationships and improve processes. It shows how companies can gain immediate and tangible returns through e-procurement.