PracticePeople In PracticeBusiness risking e-procurement benefits

Business risking e-procurement benefits

While UK businesses are showing enthusiasm for buying online, they risk squandering the benefits by adopting a piecemeal, uncoordinated approach, according to a recent survey of purchasing managers by analyst Saville Rossiter-Base.

Overall, 31 per cent of the 100 large UK companies questioned are using the internet to make purchases, though not necessarily using formal e-procurement processes. The most popular items bought this way are office supplies, and computer hardware and software.

But it’s still early days for e-procurement. Internet-based purchasing accounts for less than 10 per cent of all procurement reported by the survey respondents, and a quarter of those only started using it in the last six months.

Of the respondents already buying online, more than two thirds couldn’t estimate how much it saved them. Even worse, about a quarter didn’t think they were saving money at all.

‘This suggests there is something going wrong in the process,’ said Tim Waters, head of purchasing specialist e-Net Software’s ebusiness division, which sponsored the survey. ‘It’s essential to understand how different parts of an organisation can interact electronically to pool purchasing power.’

This echoes a warning issued by KPMG Consulting in the summer, when principal consultant Peter Loughlin said: ‘Companies should avoid automating just one part of their purchasing chain, as this only transfers the cost from one department to another.’

This article first appeared in Computing magazine.

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