Benefits of an efficient purchasing process
Managers are literally allergic to pompous marketing messages that promise miracles on the spot.
Benefits of an efficient purchasing process
Managers are literally allergic to pompous marketing messages that promise miracles on the spot, the impossible within three days and a perfectly managed corporate purchase within a week at the latest, which immediately translates into savings of W% in the purchase price, X% in administrative costs, Y% in saved time, Z% in improved quality, and I'm running out of letters for the next abracadabra.
We therefore decided to explore the real experiences of Promitea shopping software users. For the sake of clarity, we also present the context in which the result was achieved:
A cosmetics manufacturer achieved a 45% reduction in tender process costs through pre-configured templates (everything is configured and then the buyer clicks "use existing template"), e-auction and software comparison of supplier bids (the buyer can choose to select the best bid globally or pick line by line), and computerized supplier selection approval and communication with suppliers. The next step will be to link Promiteo with enterprise software so that purchase requests and results are automatically interfaced and buyers are saved additional administrative work.
Appropriate context: whenever you are creating a large number of repeated or similar-type procurement procedures (e.g. different types of labels). Conversely, the savings are negligible for large, strategic tenders, where administration is a negligible part of the buyer's activities (compared to market research, specification tuning, innovation, negotiation, implementation phase).
The food holding estimates long-term price savings of 5 to 12%, depending on the commodity, and measures the savings from real market prices. The savings come from good purchasing marketing (all upcoming tenders are published on the purchasing portal and new suppliers can register), from a well thought-out e-auction that takes advantage of the competitive struggle between suppliers, from a well thought-out tender strategy that can have several rounds and can be multi-criteria (i.e. It is not only the purchase price that is competed, but also the operating costs, payment terms, etc.) and the elimination of "non-standard behaviour" (through the log, the manager can see who, when and what changes have been made in the bids and can therefore react in time).
Suitable context: the buying category is not yet optimized, there has been a change in the market (price movement, new supplier), the category is suitable for aggressive price negotiation. Especially good results tend to be for services. On the other hand, for long-term purchased and fine-tuned categories, the financial savings are minimal (no matter what the software vendors say) and you have to work for it by incremental improvement, innovation.
The industrial company estimates that fully computerized sourcing saves 60% of buyers' time. The original tendering process looked like this: receive a purchase request, upload technical documents, email tender documents and request for quotation to all suppliers, keep track of the deadline for bids, call suppliers and urge them to bid, compare bids in excel, call suppliers and negotiate price, send to boss for approval, urge boss
New process with Promitea: receive purchase request, select tender template, attach documentation, system monitors deadlines and reminds suppliers, system compares bids, buyer does final negotiation or activates e-auction, automatically forwards recommendation to boss who clicks off.
Appropriate context: always. There is no argument for wasting buyers' time on administrative activities. Use their time for activities that add value to the company. And if they can't do it, it's not their fault because they never had the time - train them and show them where the money really is in purchasing.
The preceding examples show that the computerisation of the purchasing process brings great savings. How much savings will depend on the state of your current purchasing process. The customer never buys purchasing software, but a solution to a specific purchasing problem that must result in tangible savings. Give us a call and let's talk about whether Promitea is the right solution for your corporate purchasing.
Top executives are rational people who will not be drunk on air-locks and unclear benefits; in other words, the applicant must demonstrate that e-procurement is not a cost but an investment with a clear and high return. In this article, we therefore share a simple guide on how to demonstrate the benefits of e-procurement to an organisation's bottom line, i.e. the money that implementing e-procurement actually brings to the company.
Effective purchasing, aligned with the company's key needs, contributes to long-term goals such as profitability, competitive advantage and growth in company value.
In this article we take a detailed look at the issue of home-grown software add-ons, which are found in many companies and which, despite all efforts, usually represent a major obstacle to effective and professional purchasing.
I confess that when I became a purchasing director with the authority and responsibility to develop my department, my primary focus was on developing purchasing skills, collaboration with other departments, centralization, purchasing controlling and implementing at least minimal supplier relationship management.
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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