Misconception: eProcurement cost reduction only works for commodities  

February 16th, 2023

Too many companies dismiss the power of eProcurement as only being useful for commodities and supply items. That is a mistake.

 

Today’s post is by Dave Wenig Senior Vice President of Sales and Services at SafeSourcing Inc

It’s too easy to be dismissive of a concept, especially when you have preconceived notions.

For years, conversations with prospective users and even some customers have often headed down a familiar path. At SafeSourcing, we’re talking about reducing spend and ending overpayment across all categories by an average of 24%. Then we learn that the contact is only hearing this in terms of some pre-defined set of categories. Usually that’s supply items or some other items the person deems are commodities.

What if I told you that the most impact in terms of raw dollars saved come from other categories? What if I were to say that the highest percentages of cost reduction often come from using eProcurement to source services and even custom items?

Some people would still not believe me or would still fall back on their misconceptions, even if I shared recent results like these.

  • Armored Car Services: 21.61%
  • Windows and Doors: 13.84%
  • Floor, Wall, Ceiling Tiles: 40.37% (incl. installation)
  • Cooler Glides and Shelves: 33.41%
  • Exhaust Hoods: 21.33%
  • Waste Removal: 24.04%
  • Employee Assistance Program: 55.19%
  • Common Area Maintenance (CAM): 15.97%
  • Promotional Signage: 33.34%

Here is a quick test:

  • When you think of eProcurement, what spend categories come to mind first?
  • Have you competitively sourced any of the categories in the list in the past 3 years?
    • If no, why not?

For more information, please contact SafeSourcing.

 

 

 

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