Why do organisations that have implemented eProcurement fail to get a high percentage of spend under management? According to Gartner, “the reason for the highly variable results is that efficiently and effectively supporting all types of indirect spending isn't as simple as implementing a solution”. A decade’s expertise in intuitive solution design and employment means we get more spend under management for our clients than almost any other vendor worldwide.

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Show me the Money:
The Key Factors in eProcurement Return on Investment

The introduction to Gartner’s benchmark 2011 report eloquently summarises the primary benefit of eProcurement solutions as “empowering individuals to create requisitions, obtain approvals and autocreate orders on their own behalf, while simultaneously improving compliance with budgets, contract pricing and preferred vendors. In short, delivering granular control without creating a bottleneck by routing every transaction through the purchasing department”.

It continues: “Organizations that empower nonprocurement individuals to place orders but don't implement an e-procurement solution can easily lose 50% or more of negotiated cost savings, because these requisitioners are unaware of contract pricing agreements, or because they cannot easily locate the necessary information when they need it. E-procurement solutions can even deliver 100% savings by halting and/or redirecting unnecessary expenditures”.

Those savings, however, can only be realised on the goods and services that are effectively captured in any eProcurement system – what is typically known as the ‘spend under management’, and this has become the key measure of eProcurement success.

Indeed, figures from Forrester suggest that each new £ brought under management yields between 5p and 15p in savings, as compliance with contracted pricing, spend approvals, budgetary control and process efficiencies are all brought to bear.

Scope Breadth – Why it’s Critical to Your Success

One of the most surprising findings from the Gartner report, and perhaps the most alarming one for potential purchasers of an eProcurement system, are the huge variances in the amount of indirect spend successfully brought under management by different systems and their customers.

As the report states, “most organizations implement an e-procurement solution in the hope of managing most of their indirect spending through it, and often build their business case assuming they will be successful in this endeavour”.

The shocking fact is that “more than half of the respondents have 50% or less of their total indirect spending handled by their e-procurement solution”.

Compliant, on-contract spend drives significant cost savings, but only on that volume of spend that is controlled and if that only represents 20% or 30% of the total then most of the realisable savings are still being left on the table.

Wax Digital is proud to have been ranked third in the world, with over 70% of all client indirect spend being captured in our web3 solution, ensuring our clients are able to derive the maximum possible benefit and return on their investment.

eRequisitioning – the Democratisation of Purchasing!

Directly underpinning the ability to get the maximum spend under management, Gartner tells us that “the heart of the e-procurement application is its self-service e-requisitioning capability”- another top 5 global category for Wax Digital.

According to the report: “E-requisition support is important, because this capability enables nonprocurement professionals to efficiently request goods and services on their own. E-requisitioning functionality should be configured to capture cost center data for accounting, create an audit trail of activity, make management approvals easy, verify receipt and, when needed, tie proposed expenses to the budget.”

The central premise of eProcurement is to release buyers from the burden of simply administering employee demand, a role in which they can add little value, and to give employees the tools to facilitate their own purchasing, albeit within strictly defined and controlled parameters. In turn this frees buyers to focus on strategic sourcing activity and deliver genuine bottom line savings into the organisation.

It follows therefore, that a system which leads the market in providing users at every level with a highly intuitive, user-centric means to making the purchasing process as efficient and effective as possible should also be one that scores most highly in driving spend under management, and ultimately creating the best return on your investment.

For more details about Wax Digital web3, how and why it saves our clients more money and what it could do for you, please get in touch directly or request a 1 hour webinar and we’d be delighted to show you what makes us No 1.