e-Procurement Benefits Calculator - the value of transformation
Procurement Trends, Source-to-Pay, Sourcing, E-procurement, Invoice Process Automation
When companies make the decision to modernize or digitally transform part of their organization, this represents a commitment, a risk, an investment and it’s invariably based on a business case. For e-procurement transformation it’s no different. Lots of hard work is involved in building a solid business case but there’s value in an indicative suggestion of what your potential might be. To that end, I want to talk around an e-procurement benefits calculator we recently published.
After a few year in the industry you get a little jaded. I’m on the supplier side but I bet it’s true for the buyers too. Eventually you’ve heard the same sales pitch so many times, or some variation on the theme that you just stop listening. Ten years ago it was ‘control, visibility and efficiency’ - I’m sure some company somewhere is still using the same. That same exhaustion of excel-based ROI/Benefits calculators is pretty similar. I’ve personally build 3-4 and I’ve gotten better at being more realistic but it’s still a challenge to really get a conservative result.
But I don’t want to badmouth calculators because in fact, they do something useful. They give you an indication of what might be possible. This isn’t something you can take to the CFO and then and there ask for 1 million euros for your great transformation idea. It is however something you can use to get started.
Take our calculator for example. We want you to get excited without having to work so hard which is why we only ask for 3 inputs (these days people have ‘form-fatigue’). Revenue, Industry and your own guess at a business/process maturity level. To me this makes sense because Based on your industry, we can calculate the average amount of indirect spend (we use CAPS benchmark data) and we can use your maturity level to discern just how much opportunity you have in various parts of your process to improve. Obviously if you are incredibly modern then you probably don’t have much to improve compared with an average or laggard - performance-wise.
So, just three inputs and you get a number. The explanation isn’t there in detail but in fact, the only way we can create an ‘indicative’ result is by using industry benchmark data (which we do). So the result is general and that’s fine but there’s still work for you to do - but how does this help me? Take the next step and download the report which goes into detail about what those best practices are which will provide you the results you are aiming for. Then you have to read the report, think about it, apply it to your own situation and begin to consider what your own objectives are and how you could measure success. Then, build your own business case, armed with as much information as we can provide you.
That’s all I wanted to say. Now that I’ve defended ROI/Benefits calculators against the detractors I feel better about my day - maybe even my week (I’ve been here way too long haven’t I). Maybe I could become a travel photo-blogger?
You’ve made it to the end and now it’s time for your reward. So how can I help.
Lastly, if you just want to find out more about the tools which provide the value, you can find them here >>
Rowan has more than 10 years of experience in the purchase-to-pay arena. During this time, he has managed the go-to-market for a diverse set of portfolios including Accounts Payable Automation, B2B Networks, Financing Services, eProcurement and Product Information Management.
Read more blog posts about E-procurement
Building a foundation for source-to-pay
27 - 01 - 2020
It wasn’t too long ago that a colleague of mine suggested that the worst thing an organization could do (when building up their source-to-pay) was to focus on the low-hanging fruit
An Interview With Dirk Fischbach - Source-to-Pay in 2019, a Review
19 - 11 - 2019
We recently had the opportunity to catch up with one of the busiest guys at OpusCapita, Dirk Fischbach. Dirk is the Head of Procurement & Invoice Automation at OpusCapita.
Procurement contradictions: ambition and reality
22 - 10 - 2019
CPOs operate where contradictions exist between ambition and reality. The Procurecon Report does well to describe the current path to e-procurement digitalization.
Other content you might be interested in:
E-procurement Savings Calculator
Use our E-procurement Savings Calculator to quickly see the potential savings your procurement team can generate by digitizing their processes.