E-procurement tools preferred to ERP systems - report

According to the report, e-procurement is an essential part of the purchasing professional toolbox with nearly 90% of large companies being equipped with a dedicated tool (86% of the “Trending in Procurement” panel say their company has deployed an e-procurement tool). Of these, 60% indicate that the type of tool deployed is an e-procurement module developed by a specialized e-procurement provider, 20% list an e-procurement module that is part of an ERP system and the remaining 20% use another type of tool (primarily internal developments). This preference of purchasing departments for specialized e-procurement solutions as compared to ERP functionalities is based on several factors, as the report suggests: faster deployment and return on investment, procurement expertise and a better coverage of procurement functional requirements.

Other findings include that for a majority of purchasing professionals, e-procurement solutions are primarily designed to manage indirect procurement, thus 82% of the panel uses e-procurement tools for managing indirect spend only.

Finally the business benefit most frequently cited by the survey panel, derived from the implementation of an e-procurement solution, is an increased visibility into the overall purchasing process, from the purchase requisition to the invoice processing (procure-to-pay process). This greater visibility into company spend improves the knowledge of company purchases, assists in optimizing the supplier panel, allows the aggregation and sharing of orders, highlights savings opportunities by spend categories or by supplier and, in the end, helps obtain the best commercial conditions during negotiations with suppliers, the report concludes.

The “Trending in Procurement” questionnaire entitled eProcurement & Purchasing departments: where do you stand today? was sent by email to a database of European and North American procurement and finance professionals and distributed in a paper format during the latest Ivalua events. Eighty-four percent of participants belong to companies with a spend volume over EUR 100 million. A total of 191 responses were collected and analysed: 41% of respondents are located in North America (78 responses) and 59% in Europe (113 responses).