B2B e-Commerce or e-Procurement is here to stay. Vendors and buyers alike who leverage the power of e-Procurement receive numerous benefits including, among others:
With prices rising, it may be time to take a closer look at procurement. For many businesses, the procurement process represents a valuable opportunity to save money and reallocate resources. In a recent Bain & Company executive survey, more than half of the respondents said cost pressures constrain their ability to make strategic investments. Considering that procured costs can represent 25 to 60 percent of a company’s total costs, it’s well worth examining how this process could be managed more effectively.
Happy New Year!Regardless of how you fare with New Year’s resolutions in general, now is a great time to resolve to squeeze every penny you can out of your procurement dollar. Looking back on our blogs from 2011, you’ll discover some great tips to help you realize savings by updating your organization’s procurement process. For your convenience, I am summarizing some of the high-profile tasks you should take on immediately.
Task #1 - Make procurement a priority in 2012.SupplyChainDigital.com has published on its site the article, Making procurement a 2012 priority, by William Gindlesperger, Chairman and Chief Executive Officer, e-LYNXX Corporation. In the article, Mr. Gindlesperger emphasizes that procurement “has earned its place at the strategic decision-making table of any organization that wants to improve its bottom line.” While it may seem to be obvious that procurement and procurement practices have a direct connect with an organization’s financial viability, we agree with him that this needs to become a priority – a top priority.
Task #2 – Commit to forming a mutually-beneficial relationship with your vendor partnersIn our blog entitled, 5 Tactics to Becoming the Fittest in the eCommerce Evolution, I wrote,
“The fittest Vendors and Buyers will internally promote and put into consistent practice procedures to support an open and free-flowing level of communication within and outside their organizations.” You can refer to our earlier blog, What is the ecommerce evolution?, for more details.
Task #3 – Commit to exploring and leveraging eProcurementAdvances in information technology and cloud computing have made eProcurement affordable and reliable. In our blog, Procurement Partners eCommerce Evolution Blog, I wrote that businesses today can leverage “enterprise-class features, instant application service delivery and management, easy set-up and use, reliability, availability, responsiveness, security and encryption, scalability, data storage and backup, user and systems support services, Business Intelligence reporting, high availability, business continuity, interoperability with many platforms and 3rd parties, and disaster recovery.” If you haven’t already done so, include technology in your procurement processing planning.
Task #4 – Create and implement an effective planThe blog mentioned above also cited what is likely the most important task to tackle from the start - planning. “The fittest have a plan that will put into effect their commitment, best practices, and the required technologies. The plan will include a specific statement of the goals; deadlines; obstacles; people, groups, and organizations which can assist; the benefits to achieving the goal; the skills needed to acquire the goals; and development of the plan.”
New Year’s resolutions have the tendency to evaporate over time. However, in today’s economy that is a luxury few can afford. Get back to the basics and make streamlining the procurement process a priority.
What steps have you taken to economize in 2012?
In past blogs I’ve referred to Patronizing Partnership as the highest level of eProcurement Evolution, a Buyer/Vendor relationship marked by trust, cooperation, and mutual support. Let’s discuss this in more practical terms which go beyond the platitudes and attitudes, first by defining what is eProcurement Evolution, specifically, complete procurement automation. (In Part II, I’ll illustrate the benefits of eProcurement with a plausible ROI scenario.)
Introduction – A review
Last time, when I addressed the theme of eCommerce evolution, I wrote that for eCommerce to evolve Buyers and Vendors alike must trust each other through communication and consistency in services, processes, and meeting commitments. And they must trust and implement technologies and innovations as well as further refine their practices and reach their goals.
Actually, for me, eCommerce Evolution is an exciting concept, because behind the scenes of the implementation of emerging technologies in commerce, a mutually-beneficial relationship is materializing between the Buyer and the Vendor. At Procurement Partners, we view the eCommerce Evolution in two ways: the buyer-vendor relationship and the technologies employed. We strongly believe that both go hand in hand, that each has influenced the other and continues to do so.