Best practice process can cut time and costs by half

28 March 2002
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28 March 2002 | Robin Parker

Best practice e-procurement processes can more than halve purchasing time and costs, according to the second phase of a CIPS-sponsored project.

The total "procure-to-pay" process can be cut by 59 per cent in terms of both time and cost, responses to the self-diagnosis toolkit, I-Save, suggest.

I-Save was set up last year by Oracle in collaboration with CIPS, consultancy KPMG and the Bristol Business School. It is intended to allow purchasers to build solid business cases for e-procurement based on empirical evidence.

The results show greater savings in identifying suppliers than in later stages such as invoice matching.

Phil Wood, Oracle's marketing manager, said this shows that the take-up of end-to-end e-procurement systems is still low.

"Savings only really come together if you examine the linked-up procure-to-pay process," he said.

I-Save's first stage showed that an electronic system, supported by competent purchasing practices, cut costs by nearly 8 per cent.

The second phase polled 127 purchasers, more than three-quarters of whom had begun to implement e-procurement.

They identified the key enablers and inhibitors in considering e-procurement.

Enablers included management of supplier relationships and the implementation of software, while inhibitors comprised lack of resources and the low prioritisation of e-procurement.


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