Seeking Approval for E-Procurement Tools; The Dilemma of the Purchasing Manager

Pity the purchasing manager who wants to go to his/her boss and ask for approval on an e-procurement program to support the work they are doing. Typically understaffed and over worked, many senior executives fail to see the potential value of e-procurement. They expect the manager to source goods and services in the usual way and get the best price. How hard can that be? What else could be needed for this?

Naturally the manager would go through the usual process, and when asked, he/she can say that they talked to several suppliers, negotiated the best price, and here it is. So everyone believes they have done their job and secured the best price available.

But in actual fact, if you truly want to go after the best cost for the level of quality and service you need then it does take a different approach and new technology. The purchasing team has the potential to contribute substantially more value to the organization, but only if equipped with the right tools and right process.

This is where e-procurement comes in, and delivers:

  • State of the art e-auction software that encourages vendors through a reverse auction process to present their actual best price. Interesting that in most cases the incumbent comes in lower than their stated best price and in many cases by a substantial amount.  Studies have shown that this cannot be achieved through the traditional RFP process. With an average savings of 24%, it is hard to justify not using e-procurement.
  • Better and faster RFPs – the traditional process is a huge effort ranging from document creation, sourcing vendors, response assessments, recommendations, and award of business. E-procurement can deliver 3-5 times more RFPs than the traditional process in the same amount of time.
  • Process documentation – all the activity throughout the process is captured electronically providing not only access anytime, anywhere, but also providing a complete audit trail.

So in fact, e-procurement should be an easy sell. You certainly don’t want your competitors getting that cost advantage while you lose out on it. And when you see so many companies and government organizations (the US is well ahead of Canada on this) adopting the e-procurement process, getting on board only makes sense.

Eugene Duynstee

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