- 7 - Understanding the benefits of e-Procurement Andy Gueritz, Jan 2001 © 2001 Sixhills Consulting Ltd & Author For example, IT contractors, who are usually billed monthly in arrears, require a system that can manage the life-cycle of the contractor and can deliver efficiency improvements throughout the process. This is a very different procurement need from commodity items with well-recognised stable specifications such as office supplies, or metered services such as telecommunications costs which benefit more from a system that links pricing to an industry index and allows reconciliation of recorded usage against billings. Conclusion Most organisations, irrespective of size or principal business activity, have considerable scope for realising cost savings in the area of procurement. These savings can be achieved by eliminating inefficiencies in the sourcing, procurement and payment cycles of their overall procurement process, by the introduction of e-Procurement systems. The specific benefits an e-Procurement system can be expected to bring include:  Lower transaction costs  Shorter order cycle time  Higher compliance levels  Lower inventories  Lower prices If implemented appropriately and part of a holistic procurement vision, a suitable e-Procurement system will realise substantial long term cost savings for the host organisation Andy Gueritz, Jan 2001 E-Procurement Category Take-onSuitability for B2B E-commerce51SuitabilityHighLowPayProcureSourceCatalogue BasedElectronic Bill Presentment/Authorisation/Payment51Example Categories• Metered services– Telecoms• Labour– Cleaning– Temps– IT Contractors• Bundled services– Media• Specified products– DistributedComputing H/W1Usage Reconciliation15135154E-markets• Commodities with UPC/SKU– Office SuppliesWorkflowE-Procurement System Examples1*51213551115553551135515E-Procurement Category Take-onSuitability for B2B E-commerce51SuitabilityHighLowPayProcureSourceCatalogue BasedElectronic Bill Presentment/Authorisation/Payment51Example Categories• Metered services– Telecoms• Labour– Cleaning– Temps– IT Contractors• Bundled services– Media• Specified products– DistributedComputing H/W1Usage Reconciliation15135154E-markets• Commodities with UPC/SKU– Office SuppliesWorkflowE-Procurement System Examples1*51213551115553551135515
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