06 May 2016 Things you thought you knew about e-procurement that you don’t #2 – e-procurement is all about buyers
For the most part, procurement and e-procurement are traditionally discussed from the perspective only of the buyer, with almost no mention of the supplier except as a passive participant –and frequently victim– of a process.
A moment’s reflection will show that this is misleading. Just as procurement is about creating and maintaining relationships with a supply-base, so e-procurement is a set of tools which support that same end. If a buyer wishes to gain commercial benefit from the purchasing process, then the supplier must have a full part to play in delivering this. For example, should you wish your supplier to lower their prices, you should ensure you assist them either in cutting costs or gaining some other valuable benefit from the business/process change.
Elcom surveyed their customers to see what they thought the benefits of e-procurement were. The benefits they identified include:
– Accuracy of orders – fewer queries and errors
– Efficiency – orders sent by agreed route
– Content – reduced requirement to print hard copy catalogues
– Technical – easy to provide content including punch-out connection where required
– Financial – fewer disputes from invoice/order mismatches and consequent late payments
Where accounts payable processes are examined and e-invoicing is implemented, the benefits can also include better payment times (although e-invoicing is also a more complex subject than often suggested). E-invoicing solutions should be designed to meet the business needs of suppliers as well as buyers.
Working jointly to introduce on-line communications channels pays dividends for both buyer and supplier. By contrast, imposing some form of e-solution which merely increases the suppliers’ costs is unlikely to lead to a sustained reduction in prices.