Sometimes, it seems that you have to spend in order to save.

But proponents of taking procurement processes on line are quick to point out that in the long run, the savings from this investment can be significant.

As part of building your case to consider e-procurement, start selling its benefits to your suppliers.

There are three big selling points:

• When a supplier receives your purchase order automatically into its order management system, the supplier saves time and trims labor costs. No longer will people be forced to hand-enter information into the supplier’s ordering system, which will greatly reduce the incidence of errors.
• The increased accuracy that comes from no longer hand-keying information into the system will help make sure the suppliers’ customers get their orders more quickly.
• The final benefit is that because there is no longer a delay in getting orders into the supplier’s system, products will be delivered faster and the supplier will develop a reputation as being extremely responsive to customer needs.

Chances are, people at your company will want to know the estimated Return on Investment for automating procurement processes.

The best that experts can speculate is that a good e-procurement system will save 5% to 10% of your annual spend. Your own ROI will depend on your annual budget and the vendor you select for the e-procurement system.

Tags: e-procurement, ordering, orders, procurement, suppliers