In this 3-part series, you will learn why digitizing your procurement process is no longer a luxury, but essential in the Procure-to-Pay (P2P) process for reducing costs and optimizing spend management.
Digital transformation is the talk of the town, or should we say industry. You read about it, and you hear that if you ignore it your business is doomed to fail. Let’s look beyond the doom and gloom in those statements. It’s true that there is no way to avoid digitization. It has gained full momentum and will continue to do so. And that’s a good thing. Digitization is by no means a bad thing. Small steps are often enough to help companies to create a sound start for the digital age.
The procure-to-pay process, with electronic procurement as a core element, is one of the building blocks to begin the digital journey. It is always worthwhile to put electronic procurement on top of the list of priorities for digital transformation and to start with looking at the supplier relationships, supply chain digitization, ordering, procurement process automation and clarity on spending.
The following are two of six reasons we will outline in the following weeks that will make for a convincing business case to push digitization of your procurement processes.
1.Quick return on investment
According to this year’s ProcureCon Europe study, 36% of the managers responsible for procurement believe that an immediate return on investment is critical to tip the decision in favor of electronic purchasing. In practice, electronic Procurement really does bring about a faster return on investment when compared to traditional ways such as investing in modernizing machinery or expanding manufacturing equipment.
2. Noticeable reductions in costs
Costs are clearly a significant factor in ROI calculations, both from a process perspective and regarding procurement expenses. Practical experience has shown that an electronic procurement solution already demonstrates a major impact on cost reductions within a time frame of six to eight months. Just let the numbers talk and see what this cost reduction would mean. We can estimate annual savings of five percent on purchase prices as a result of introducing process automation and standardization, and optimized supplier management based on a catalog system. The German Association for Supply Chain Management, Procurement and Logistics (Bundesverband Materialwirtschaft, Einkauf und Logistik e.V. / BME) even assumes that the figures can add up to six to eight percent (a Hackett Group report from 2014 puts best in class at 9% savings). These estimations for products and services allow you to evaluate how much you can decrease your company’s procurement expenses with a reliable eProcurement solution.
Mark your calendars for the QAD MWUG’s Spring 2017 Conference, scheduled for March 19-21 at the Henry Hotel in Dearborn, MI., and be sure to stop by our sponsored booth to learn more about what we can offer on eProcurement and AP Automation; key components in the Procure-to-Pay process…!
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Who is ISS Group?
ISS Group delivers Solutions which Digitize Business Processes to Connect People and Processes via the Cloud, Mobile devices, and Social Networks
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Morristown, NJ 07960
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