eProcurement ROI Calculator

eProcurement ROI Calculator

Is it even worth having an eProcurement system ?

Eyvo’s eProcurement system provides a way of purchasing goods and services by replacing manual inputs, passing around papers to be signed, keeping track of information in disparate systems, and generally accelerating the purchase-to-pay process.  In addition, as a cloud-based SaaS solution, information is always available and secure.

Scenario: Janet, the lab technician, requests lab supplies.  David, her manager, has to approve the requisition, then it goes to Fiona, the purchasing specialist.  Since the order is over $2,000, the order has to be approved by Clare, the purchasing manager before the PO is submitted to the supplier.  Clare then tells Fiona to submit the order to the supplier.  Supplier confirms the receipt of PO and delivery time, hopefully at the same time.  Upon delivery, receiving clerk Tony books-in goods.  Best case scenario, once the goods are booked into an inventory system, such a system alerts purchasing and accounts payable to proceed with approvals to pay for the goods.  In less complex situations, the paperwork of receiving, bills, and payments must be handled by walking them to the various personnel, entered into systems, and placed into filing cabinet just to be stored and shredded in a few years.

With the Eyvo system, all of this could be achieved in a matter of minutes with a single point of entry ; the requisition;  which is then converted to a purchase order (PO) that is approved and emailed to the supplier.  Because the process is all electronic, there are no errors in the data entry between steps, and the approvals are instantaneously delivered – so the PO can be delivered to the supplier with a minimal time delay.  This is especially handy when time sensitive special pricing or discounts apply.  The receiving and processing of bills and payments are equally efficient as all information is electronically stored and distributed.

Cost of process under best case (when request, PO, receiving, and bill all match):

Old Process Cost eProcurement Process Cost
Price search – 20 min.
(website search, previous orders lookup, calling/email supplier)
$10.00 Price search (Optional) – 5 min.
(create RFQ for new items)
$2.50
Generate Requisition – 5 min.
(manual write up, system entry, other)
$2.50 Generate Requisition – 3 min.
(pick items from catalog or punchout)
$1.50
Collect Requisition approval – 10 min.
(walking to Approver, composing email)
$5.00 Get Requisition approval – 1 min.
(push of a button)
$0.50
Generate PO – 5 min.
(transfer Request into accounting package, convert Request into PO)
$2.50 Generate PO – 1 min.
(upon Requisition approval, PO is generated with a push of a button)
$0.50
Get PO approval – 5 min. + costs
(print-walk-walk, email-email, call-walk/email)
$3.00 Get PO approval – 1 min.
(push of a button)
$0.50
Submit PO to supplier – 5 min. + costs
(fax, scan-email, call-email, email, call)
$3.00 Submit PO to supplier – 1 min.
(push of a button)
$0.50
Supplier to confirm PO and delivery date – 5 min.
(email, call)
$2.50 Supplier to confirm PO and delivery date
(electronic alert)
$0.00
Receiving – 10 min.
(enter and walk/email/call receiver to Accounts Payable)
$5.00 Receiving – 5 min.
(enter and all necessary departments are notified electronically)
$3.00
Bill processing – 5 min.
(gather, match PO/receiver/bill, enter bill)
$2.50 Bill processing – 1 min.
(enter bill and system checks for errors)
$0.50
Total Cost of Old Process $36.00 Total Cost of eProcurement Process $9.50
Total Savings per Order $26.50

* costs are based $30/hour

We encourage you to do your own calculations and see how much you could save with our eProcurement system.  At $49.50/user/month, you need process only a few orders to recover the cost of subscription.

We are confident that our application will more than pay for itself the first month you use it.  We have three types of packages and multiple add-on modules to suit your needs.  Contact Us for more information.

Happy eProcurement!

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