Hannu Kilpeläinen
Product Marketing Manager

How will you know when you’ve succeeded in your e-procurement program? Certainly there will be a range of benefits, but unless you can point to solid procurement metrics you’re left with little more than subjective opinions. 

The goals you set for your e-procurement program should be measurable, quantifiable
and time-specific. While it can be difficult to establish an effective baseline to judge the program’s success against, software vendors, industry analysts, independent consultants and academics have all produced publicly accessible data on this topic. This information offers a foundation from which you can develop ambitious – yet achievable – program objectives.

Here are some examples of tangible, measurable key performance indicators (procurement KPIs) that different organizations are improving through e-procurement:

• Number of suppliers: As part of leveraging spend analytics and e-procurement to reduce maverick spend and increase user adoption you will direct more spend to fewer suppliers. This places you in a position to negotiate better terms with those suppliers.

• Maverick spend performance: The goal for buying all frequently purchased goods and services should be self-service, using catalogs or forms negotiated with preferred suppliers. An automated select-and-submit approach for the purchase of indirect goods and services makes life easier for everyone. As more orders go through your e-procurement system, the time needed to approve invoices will be reduced.

• Requisition-to-order cycle time: As part of tackling maverick spend and driving user acceptance, you should already think about a service level. Buying something with legacy systems may take weeks to fulfill, and that is not something people are willing to wait for – making them prone to go maverick. Today’s online shoppers are used to quick delivery and expect the same at work as well.

• Early pay discounts captured: This goal might not be the most obvious target for e-procurement programs, but by working with Accounts Payable (AP) to get suppliers paid faster, AP can take advantage of suppliers’ early payment discounts. This represents true cooperation across AP and Procurement where the whole P2P process is optimized. 

Want to learn more about how you can ensure the success of your e-procurement project? Read our complimentary e-book: 7 Secrets to Successful e-Procurement >>

Read our complementary ‘how-to’ guide for making e-procurement work for your business: 7 Secrets for Successful e-Procurement