Comment: Five benefits that make eProcurement an investment asset
eProcurement software delivers many benefits to organisations looking to automate their manual procurement processes, better control organisational-wide spend or improve supplier management.
We recently surveyed 200 procurement professionals to understand how eProcurement is benefiting their organisations. The results were illuminating and showed that it’s not just the procurement team that stands to benefit from digital procurement processes, but the wider business too. Here are the top five benefits our survey respondents told us were making a significant impact on their organisations:
1. Eliminating slow and laborious manual processes
Widely considered ‘the bane’ of the finance team’s life, the manual processing of supplier invoices is an extremely time-consuming and error prone process. Missing PO or VAT numbers, incorrect financial values and non-matching line items are frequent occurrences, and manually entering data and rectifying any issues can significantly slow down the processing and payment of these invoices. 44% of our respondents are using eProcurement to automate these tasks and eliminate manual data entry from this process.
2. Sourcing new suppliers
Saving time and reducing risk by using eSourcing to find new suppliers, was also considered a benefit of eProcurement for 43% of our survey respondents.
Offering both online tendering and auction capabilities, eSourcing helps drive best value and optimises strategic sourcing outcomes. This electronic process helps remove paper, process time and manual overheads from supplier negotiations. Risk is reduced as only suppliers who meet criteria specified at the start of the process are able to tender for work.
3. Sourcing strategy improvements
40% of our survey respondents looked to eProcurement to gain a better insight into what the organisation is spending to help improve their sourcing strategies. This clear view on what is being spent, by who and why is key to helping the procurement team better understand the organisation’s current and future sourcing requirements. It can also help to identify future sourcing opportunities and savings in the future.
4. Faster order to delivery timescales
Speeding up order to delivery timescales by automating requisition approvals is a key eProcurement benefit for 40% of our respondents. Enabling fast online approvals, eProcurement software gives both users and approvers instant access with no downtime waiting for approvals, or paper trails to manage and file away.
5. Spend visibility
Getting a grip on what is being spent across the organisation to enable more accurate budget and cash flow management is also a key benefit of eProcurement for 40% of our respondents. Spend visibility isn’t easy, especially for those organisations with complex, indirect spend categories. However, eProcurement enables spend across the business to be tracked and monitored and be available in real-time at the touch of a button. As a result, organisations can better control costs and cash flow, identify areas for cost savings and enable more accurate budgeting.
Our research shows that procurement professionals clearly have differing priorities when it comes to eProcurement software. For some, cost savings and cost control are key priorities, while for others, making improvements to the way they source suppliers or eliminating manual data processes is more important. Whatever the end goal, individual eProcurement modules can help purchasing teams meet their challenges, while those taking advantage of the full suite of tools can benefit from the wider business benefits the technology enables.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”