23 Jan 2009
The majority of UK businesses have not introduced automated procurement processes due to skills-related issues, according to research carried out by the National Computing Centre (NCC)and COA Solutions.
The survey polled 110 UK public and private sector organisations and found that only three per cent run fully automated procurement processes. Furthermore, 47 per cent have little or no automation, 18 per cent of the respondents have a “highly automated” procurement process – but cannot claim total automation – and the remaining companies claim their systems operate at a medium level.
Manual processing of documents such as invoices and proof of deliveries is still the main method used by 72 per cent of those polled, despite respondents citing benefits of e-procurement such as reduced transaction costs and streamlined procurement processes.
Only 25 per cent of the businesses surveyed have a green and sustainable procurement, but 69 per cent think that automating the procurement process could support corporate green strategies.
When citing reasons for not having introduced or developed e-procurement, popular answers by the private sector organisations surveyed included failure to involve staff in all relevant business areas, lack of skills in implementing e-procurement, as well as staff training in using such systems.
Public sector organisations blamed poor change management procedures for the lack of automated procurement.
“As well as the obvious cost and efficiency benefits, e-procurement is low-risk and provides a fast return-on-investment, which is ideal in the current climate,” said Mark Thompson, managing director at COA Solutions.
“And businesses can kick start their green agendas by automating procurement and judging by the research findings, going green still remains a key consideration for UK organisations.”
Your article 'E-procurement adoption stalls' (23 January 2009) confirms that 97% of businesses have failed to fully automate the purchasing process, but concludes that the major issue is lack of internal skills. This is not in line with our own experience.
The major issue is that the complexity of the existing procurement software products and the resulting high cost of implementation and on-going consulting makes the business proposition far too expensive for the majority of organisations to consider.
Every finance director has become very aware of the limitations of their manual purchasing systems in a recessionary market, as cash become the most valuable commodity. Most organisations have no sight of corporate spend until the purchase invoice eventually returns from approval, usually unsupported by an order or delivery note and often when or after it became due for payment.
Businesses require a low cost, easy and fast to deploy solution that fully automates the purchase to pay process. The primary benefits that are relevant today are the introduction of commitment accounting on purchase order generation for accurate cashflow forecasting, and centralisation of budget control back to the finance director. The finance director can then ensure that all expenditure is within budget, and improve control on proof of delivery, accurate pricing and accelerated / automated purchase invoice approvals.
Once you take away the cost and complexity barrier of legacy procurement solutions, finance directors are only too pleased to regain control of corporate spend and cash.
Yours sincerely,
Neil Robertson
CEO
Compleat Software
www.compleatsoftware.com
Posted by: Neil Robertson 29 Jan 2009
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