I was recently asked to perform an exercise to see if it were possible to cut costs in our procurement department ” it turned out that it was costing us about $48 for every purchase order that we issued out of our business ” Management felt there was a cheaper way to deal this so we looked to automation via software.
We reviewed the flow of information through our business and discovered bottle necks both in the approvals process and in the communications with our vendors. After suitable study we searched the purchasing software marketplace for a tool that could ease the issues we were facing. We discovered numerous purchasing software tools, and some were clearly not up to the task but one or two did rise above the rest in terms of functionality and cost benefit.
The procurement software system we chose, called eProProcure (from Eyvo eProcurement Solutions) had an efficient approval routing tool so that all our department managers suddenly had full control of their own budgets ” they could efficiently see what they had spent to date and more importantly what was left to spend.
Our Finance director and Chef Exec liked that a lot ! Plus there was a much closer audit of who was doing what on the system and our SOX compliance department loved that ! But an interesting added advantage that we hadnt predicted was that our vendors were also happy as they could now receive their orders and update our prices on-line into our system directly ” this meant we were sending out our orders in a timely fashion due to the emailed delivery but also more accurate orders due to the figures always being right on the internal catalogs.
Our cost for raising an order has shrunk to about .10 cents and the turnaround time has dropped; all in all a win-win situation.
About the Author:
Maxwell DeBlanco is an IT specialist working as a systems analyst studying software systems for purchasing metrics at a large IT practice based in Chicago. See more stories on purchasing at Purchasing Software and check out the eProcurement System discussed here.
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