My director recently asked me to undertake an analysis to discover if it were possible to cut expenses in our purchasing department The beancounters told me that it was costing us about $25 for each purchase order that was issued out of our business The directors felt there was a cheaper way to manage this so we looked to automation via software.
We looked at the run of data through our organization and found obstructions both in the manual approvals processes and in the communications between us and our vendors. After suitable study we researched the procurement software marketplace for a tool that could ease the issues we were facing. We found numerous purchasing software tools, and some were obviously not what we were looking for but a few did match our requirements in terms of cost benefit and functionality.
The purchasing software system we chose, called eProProcure (from Mikrofax eProcurement Solutions) had a unique approval routing method for cost control plus a sanity check step so that all our line managers suddenly had self control of their budgets they could see at a glance what they had spent to date and what was left of their budget to still spend.
Our CEO and Finance director loved that ! Also there was a much tighter audit of who was doing what on the system and our Sarbanes Oxley compliance guys loved that ! But a surprising spin-off benefit was that our vendors were also happy as they could now receive their orders and update their prices on-line into our system directly this meant we were sending out our orders much faster due to the electronic delivery and more accurate orders due to the prices being always correct on the internal catalogs.
Our cost for raising an order has shrunk to about .10 cents and the turnaround time has dropped; all in all a win-win situation.