Are You Making a Pointless Point in Procurement?
The world we live in is changing or putting it in better words evolving at a rapid pace. With new technological advancements every day the way we do business is increasingly difficult to foretell. 3-D printing, robotics, artificial intelligence, and by the time I am done writing this blog, we might have a few other disruptive technology available out there.
This brings us to the most important point: With so many technological advances, why are we stuck with excel sheets and are raising requisitions manually? Best-in-Class procurement organizations make sure they leave all manual work to the pros- Procurement Solutions. Originally designed to ease manual processes and to reduce time and efforts of employees, procurement solutions today are playing a key role to help you enable you with higher savings, cost compliance, reduction in maverick spend and are becoming more of a strategical masterpiece. But the questions remains, how can you justify your savings to the top management. You made it a point to implement the solution and made sure adoption rates were higher, but all this is pointless unless you can justify the value out of it!
What if you can justify it all? What if we can help you save more than $2,000,000 annually? Well, you read it right. For every $1 billion in indirect spend, 20% noncompliance results in unrealized savings of $16 million vs. the previous level of $20 million. An e-procurement solution will deliver a $4 million potential benefit by improving compliance to negotiated savings. That’s not it. Let’s assume that an e-procurement tool can reduce the cycle time by 25%, or 30 minutes per PO. For a company with $1 billion in indirect spend that processes 40,000 POs annually, 20,000 hours will be saved. If the average fully loaded wage rate is $34 per hour, eliminating 20,000 hours of work will save $680,000. We have done the hard math for you if you never believed us J
To know, you can visit our landing page which talks more about how a best-in-class procurement solution will help your organization achieve these numbers and how you can justify your ROI on procurement solution.