Companies around the globe could save a combined total of $2.3tn a year by deploying web-based e-procurement to control costs and streamline processes, according to a recent report.
Researchers at the Aberdeen Group studied over 25 multinational companies, including Dresdner Bank, Endorsia, Mercedes Benz España, and SAP AG, since August and found that those using e-procurement are starting to achieve savings.
One of the companies in the study, Belgacom, has been able to shave $1.8m off its procurement process costs. The average cost of processing a purchase order has been reduced by 75 per cent per order, and lead times have been reduced from seven days to two, the study found.
It was also revealed that companies worldwide spend $20tn annually on external goods and services.
Based on the study, the Aberdeen Group said that businesses could save between eight and 10 per cent on these expenditures, or a combined total of $2.3tn.
Specifically, e-procurement has resulted in reduced prices paid for indirect goods and services, improved contract compliance, shortened procurement and fulfilment cycles and reduced administration costs.
Frances Howarth, research director for Aberdeen's ebusiness group, said: "E-procurement and associated technologies offer companies the opportunity to streamline and consolidate their purchasing activities, with the resulting savings contributing directly to their bottom line."
According to Howarth, e-procurement will continue to demonstrate strong growth over the next 12 to 18 months.
E-procurement vendors in the study included Ariba, CommerceOne, FreeMarkets, Healy Hudson, Izodia, MRO Software, Oracle, SAP and Tranmit.
Aberdeen said that eight to 10 per cent of the largest 5,000 companies were using e-procurement software in 2001, and that by 2003 it could grow to 80 or 90 per cent.
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