1 min read

Save Money by Improving Your Procurement Process

By Procurement Partners Staff on Thu, Apr 05, 2012 @ 09:00 AM

iStock_000019812779XSmall-resized-600With prices rising, it may be time to take a closer look at procurement. For many businesses, the procurement process represents a valuable opportunity to save money and reallocate resources. In a recentBain & Company executive survey, more than half of the respondents said cost pressures constrain their ability to make strategic investments. Considering that procured costs can represent 25 to 60 percent of a company’s total costs, it’s well worth examining how this process could be managed more effectively.

Despite procurement’s significance and cost-saving potential, there is plenty of evidence to suggest that for many companies, this is an area with lots of room for improvement. When Bain & Company surveyed executives about their experience with past procurement management initiatives, 72 percent of the respondents felt that they do better and save substantially more than they have in the past. This belief was expressed just as often by the heads of procurement as it was by CEOs and CFOs.

While most executives realize they could reduce their procurement costs, actually making it happen is no easy task. Without a predefined, systematic plan for reducing costs, most organizations never fully reach the potential savings. But again, it’s not easy to create and implement such a plan. For example, 77 percent of the executives surveyed noted that their companies’ procurement efforts are especially weak when decisions are fragmented across many buyers. 

This study demonstrates the need for better integration of the procurement process. In fact, research indicates that by implementing the right tools and processes in a number of key places, you can cut procurement costs by 10 percent. Procurement Partners offers a wide variety of automation and cost containment processes to help you save that 10 percent, or even more. Contact us to learn more.

Topics: cost containment process cost saving eProcurement procurement process reduce procurement costs real savings
1 min read

Procurement – What’s in it for me, the Buyer? (Part II)

By Rusty Zosel on Thu, Aug 25, 2011 @ 09:00 AM

istock_000002069044xsmall-resized-600What is the ROI? Last time, I highlighted some of the features of the fully-automated procurement process. As attractive as the various features sound, the real synergy occurs when Buyers experience real savings. In today’s sluggish economy, in general, and because of dramatically contracting reimbursements for health care providers, specifically, ROI must be real and attainable.

Ultimately, what really matters is savings - applied (or realized) savings. Let’s look at numbers to illustrate the potential automated procurement ROI. The following hypothetical example illustrates the savings that a 2,000-unit multi-location operation could experience. Let’s assume that this Buyer purchases about $10 million in goods and services  - $7 million from large Vendors for food, medical supplies, maintenance, housekeeping,  office supplies, therapy services, durable medical equipment, etc., and $3 million for purchases of all types from smaller vendors. The savings illustrated in the model below are the direct result of the following automated procurement process features:

  • An automated order & invoice transaction process
  • An automated process for handling invoice-only transactions
  • An automated process for handling manual purchase orders

ROI Model*



*Estimates are conservative and based on extensive research. You may contact me for more information and detail on Savings Analysis. 


While the above example is hypothetical, our experience and research indicate that positive results are achievable. In these uncertain times, providers have to be able to count on realizing the savings built into their procurement contracts and experience additional savings through utilization of today’s technologies. That is how the fittest will survive.

Because the highest level of eProcurement is a “Patronizing Partnership,” where both Buyers and Vendors mutually benefit, the next blog will address the benefits Vendors experience through procurement automation.

Topics: automated order process automated invoice processing manual purchase orders invoice-only transactions ROI real savings automated procurement process realized savings


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