Research reveals SMEs are realising the benefits of procurement
Small to medium-sized enterprises (SMES) are benefitting from procurement similarly to large organisations in the way of reducing costs, controlling spending, and maximising the efficiency of labour, according to new research.
The eProcurement provider Wax Digital questioned 260 senior managers working for UK businesses with a turnover of £50mn to £250mn.
With the survey having gauged the thoughts on when procurement should be introduced into organisations, the results came back as follows:
- 77% claim to need procurement by the time it has 100 supplier contracts.
- 75% said procurement was needed once a company reaches a £50M turnover.
- 72% said once 500 invoices per month are being processed, procurement was necessary.
The survey revealed that procurement had been administered as a proactive measure by 31% questioned, with 48% implementing it as a reactionary measure to poor performance, demonstrating that many businesses have not recognised the tipping point at which they should introduce procurement.
Of the 82% of those surveyed that had experience of introducing procurement into their firms, the majority revealed that doing so was a significant priority for them prior to implementation.
In response to the research, Wax Digital’s Managing Director Paul Ellis stated that proactive measures in introducing procurement are more desirable, but in any case, SMEs are recognising the benefits that procurement can bring.
“In spite of the barriers to adoption experienced by some of our research respondents, none of these challenges are unsurmountable, and forwarding thinking organisations will recognise their tipping points and put in place the necessary procedures to prevent a negative situation happening in the first place.”
“No two businesses are the same and each will have its own procurement tipping point.
“The research shows that UK businesses are realising that formal procurement isn’t just for large organisations, and that any business that wants to control spend, improve its supplier performance and eradicate slow admin-heavy processes from the business can benefit from the adoption of a more professional approach to procurement.”