Digitalization of procurement for complete beginners: Do we even need procurement digitalization in a smaller company?
Practice shows that the introduction of an e-procurement system makes sense for virtually any company that handles a larger volume of purchases. Digital procurement makes it possible to accomplish the same work in less time, with less effort, and with better results. In the table, we have listed the benefits from the perspective of a smaller company that is just starting with digitalization.
In the following table, we provide a brief answer to each question. A detailed answer can be found in the follow-up articles.
| Benefit | Tangible benefit for buyers in a small company | Explanation |
|---|---|---|
| Higher efficiency and speed | Tendering with just a few clicks. Automatic comparison of bids. Error prevention. | Digitalization makes it possible to accomplish the same work in less time, with less effort, and without errors – processes run automatically according to predefined rules. |
| Savings (reduction of price and costs) | Tangible price reductions. Possibility to take total cost of ownership into account. | Thanks to supplier competition, multi-round tenders, electronic auctions, and automated analyses, you achieve lower prices and better conditions. |
| Lower administrative costs | Huge administrative savings. | The cost of processing a single procurement case drops to one third of the original expenses. |
| Transparency and compliance | We can keep an eye on both internal customers and suppliers. | All activities take place according to predefined rules, the process is auditable, and the risk of fraud or corruption is reduced. |
| Fast return on investment (ROI) | The investment often pays for itself already with the very first tender. | Companies achieve up to a tenfold return on investment, and even “weaker” results bring 4–5 times the invested costs already within the first year. |
| Direct and indirect savings | Measurable savings compared to the current state. More time for essential activities. | Direct: lower prices, order consolidation, discount tracking. Indirect: time savings, less manual work, fewer errors and complaints. |
| Competitive advantage | A head start over the competition in terms of costs. | Without digitalization, the company is leaving “money on the table,” losing potential savings, and falling behind competitors that have already implemented modern tools. |
| Meeting customer and ESG requirements | Preparation for customer and regulatory requirements. | Digitalized procurement makes it easier to meet the requirements of major clients, legislation, and sustainability trends. |
It is a fact that companies already using e-procurement tools achieve savings thanks to supplier competition, multi-round tenders, automated analyses carried out by the software instead of the buyer, and electronic auctions.
The second concrete benefit of e-procurement is the dramatic reduction of administrative costs per order. Experience shows that the average cost of processing a procurement case drops from €107 in organizations with manual processes to just €32 in companies using digitalized tendering. That is nearly one third of the original cost!
Finally, digitalization also increases transparency and compliance. All activities take place according to predefined rules, the risk of fraud or corruption is reduced, and procurement can be easily audited.
To sum up, thanks to digitalization, buyers achieve a return on investment (ROI) of up to tenfold, and even in “weaker” cases it is 4–5 times the invested amount within the first year! The savings are both direct (lower purchase prices, order consolidation, automatic tracking of early payment discounts) and indirect (time savings, less manual work, fewer errors and complaints).
And what happens if digitalization is not implemented? The risk is a continuation of inefficient “business as usual.” Experts warn that a company delaying procurement digitalization is literally leaving money on the table – losing potential savings year after year and at the same time falling behind competitors that have already adopted modern tools. In addition, it may struggle to sustainably meet the requirements of major customers, typically in areas such as compliance, ESG, and specific supplier requirements.
Digitalization of procurement for complete beginners: Key questions and answers
Digitalization of procurement for complete beginners: How to choose suitable procurement software?
Digitalization of Procurement for Complete Beginners: How much will it cost?
Digitalization of procurement for complete beginners: How does implementation and operation work?
The key benefit of the digital transformation of procurement is optimization precisely in those areas where money leaks out of the procurement process.
Several companies tested automatic ordering through AI, whose task was to independently evaluate needs, place operational orders, and maintain optimal stock levels. The result often exceeded expectations — unfortunately, in a negative sense.
Return on investment within the first year of project implementation.*
*The ROI estimate is based on real data gathered from our clients and their successfully completed projects.
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