E-procurement cuts purchase-to-fulfilment cycles

Using e-procurement software applications for indirect purchasing can result in a reduction of between 70% and 80% in purchase-to-fulfilment cycles, says an Aberdeen Group report. Indirect e-procurement applications automate and support the purchase of non-production goods including office supplies, maintenance, repair and operations (MRO) goods and computer equipment.

According to Aberdeen, these applications not only shorten acquisition cycles, but also reduce costs. Inventory costs can be reduced by between 25% and 50%, while the price of goods and services typically falls by between 5% and 10% through indirect e-procurement automation. Requisition processing costs can also fall by around 73%, while "maverick spending" decreases by 51% for the average company. By automating the procurement of indirect goods, Aberdeen says that organisations can better understand, and thus control spending, while improving processes and increasing productivity as well.


Benefits of indirect e-procurement
  Traditional/ manual   E-procurement  
Price of materials/ services 5% to 10% reduction through improved contract compliance
Purchase-to-fulfilment cycle 8.36 days 2.27 days
Administration costs $114 (€129) / requisition $31 (€35) / requisition
Reduction in maverick buys 51%
Source: Aberdeen Group

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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