E-procurement is More than a Purchasing Tool

New monograph helps companies leverage e-procurement for improved bottom line.

Raleigh, NC, October 24, 2002—On average, companies spend more than half of their revenue to acquire goods and services and administer the acquisition process. Amazingly, they have historically paid little attention to how that process could be used to cut costs. B2B technologies such as e-procurement have since entered the equation, bringing opportunities to reduce costs by revising and enforcing internal procurement policies, capitalizing on technologies and further leveraging the power of the Internet.

"E-Procurement," the new monograph from Tompkins Associates, explains the e-procurement process and describes the correct approach for developing an e-procurement system, business drivers to consider when developing your strategy and the technology models and applications necessary to support the business process.

"Despite the current economic situation, the value equation for e-procurement cannot be ignored," says Ken Sloan, Principal, Tompkins Associates. "Those organizations and supply chains that have embraced e-procurement and supply chain collaboration are realizing incredible returns. In today's marketplace, no one can deny that the fastest and most efficient supply chains will emerge as industry leaders."

According to Aberdeen Group, "Using the Internet to automate purchases can help companies trim procurement costs and time by as much as 70% or more. The average mid-size firm can expect to save almost $2 million per year with Internet purchasing. In 2000, a purchase order that was processed manually cost $107 but the same transaction cost only $33 when automated."

More than just a purchasing tool, e-procurement is a Total Cost Management solution that looks at each area within the organization that touches or affects spending and the processes and policies that govern it.

A Conference Board survey of 43 European and North American companies reported that 60% of respondents considered streamlined internal processes a major impediment to e-procurement. The "E-Procurement," monograph illustrates how to streamline these internal processes, as well as how to integrate with existing technology in order to implement an effective e-procurement strategy. This process requires an approach that includes identifying business goals, planning the implementation, implementing the solution and measuring the results. The four-step model results are increased shareholder value through increased revenue, profits and capital efficiency, and the means to build superior supply chain relationships.

"E-Procurement" and other supply chain resources are available for free by visiting www.tompkinsinc.com/publications/monograph. For more information on Tompkins Associates and its supply chain services, contact sales@tompkinsinc.com or call 800-789-1257.

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