Supplier Enablement

Supplier Enablement - how do you measure up?

Are you a best in class, average or a laggard? Do you measure your performance in these terms?

New research once again confirms that for those implementing eProcurement the top two pressures are:

1. Enabling Suppliers - external to the business
2. Driving User Adoption - internal to the business

The good news is that eProcurement is now delivering real business benefits.

What should you measure and how do you classify your performance?

The bottom line is that you are looking to reduce costs in two ways:

1. Reducing the invoice cost of purchased goods and services
2. Reducing the process costs - the cost to raise an order, to process an invoice etc.

What do you measure?

Clearly savings; a £1 saved whether on the invoice cost or through productivity is a direct contribution to profits.

The other measure is what you control. This is a measure of how much of your spend is under control, that is, spending that you have visibility to before it is committed? Those best in class work at getting more spend under control.

If you are buying essential essential goods and services and these costs represent 20% of your turnover (invoice cost + admin costs) and your competitor is achieving 17% then they have a competitive advantage.

If you do not know what your admin costs are, take the people and facility costs of your procurement and accounts payable departments as a baseline.

The amount of information and experience available now confirms that the function of procurement is now a big contributor to business performance. eProcurement has well and truly landed.

Click here for help with supplier enablement

posted by FrankB @ Tuesday, October 24, 2006