PROACTIS, a global Spend Control and eProcurement solution provider, today announced it is hosting a seminar road show in the UK and US to raise awareness of the necessity of integrated end-to-end eProcurement. Industry adoption of eProcurement is strong, but there is a massive disparity in performance and confusion to its full scope.
Best-in-class organisations achieve 75% spend under management with almost 5% savings to the bottom line, while average organisations implementing eProcurement achieve less than 55% of spend under management. This is largely because most eProcurement solutions on the market are not complete, or even true end-to-end solutions, and significant aspects of the procurement cycle remain incomplete.
eProcurement has many definitions in the marketplace, and is still confused with P2P (Purchase-to-Pay), EIPP (Electronic invoice presentation and payment), and ePayment (electronic payment). It is also sometimes confused with eRFx, contract management or other discrete components of the eSourcing cycle - but none of these standalone technologies come close to implementing the full procurement cycle.
PROACTIS promotes the importance of end-to-end eProcurement and a Spend Control environment that integrates two important sets of activities:
- Source-to-Contract functions that create value: supplier management, sourcing, contract management, and supplier content management
- Purchase-to-Pay controls that capture value: supplier and item selection, purchase authorisation, PO/invoice matching, electronic trading and expenses
With integrated end-to-end eProcurement, the entire process is best practice workflow driven, no data has to be re-keyed, and no time and productivity is lost. Any narrower or a more disjointed view leaves loopholes that cause leakage of benefits.
Simon Dadswell, Marketing Director at PROACTIS said: "It's more than just negotiating a good deal, tracking of purchase authorisation, and matching of invoices. To achieve best-in-class Spend Control, both value creation and value capture functions must be performed and must be highly integrated. If just half of the process is working well, results will be diluted if the other half is not tied into it."
"On one hand, a painstakingly sourced, well-negotiated supplier agreement that is never used due to a lack of visibility or good purchase controls does the organisation no real good - value never captured. On the other hand, even a well-oiled purchase system that ensures proper approval of the 'amount' of purchase, but does not lead employees to pre-qualified suppliers, or through procurement-involved spot purchase workflows when needed, leaves staff to largely pick their own suppliers accepting standard supplier terms with little consideration of risk."
"You need both sets of processes in place and integrated in order to realise actual savings and risk reduction i.e. capture the value created by procurement. Only that portion of spend that goes through the full cycle can be considered under management," continued Dadswell.