An associate at one of my customers asked me recently if they were actually getting all of the savings from the low quotes in their online eRFX process.
This is actually a great questions and a tough one to answer if in fact it has not been planned for during the planning process. We all know that there are all sorts of saving figures quoted in the e-procurement industry for just about any product or service available.
There are a number of areas necessary to consider when trying to figure out not only your ROI on these projects, but more importantly how much of the savings made their way to the bottom line and what is your leakage percentage. Some of those are as follows.
1.?How long did it take you to award the business?
2.?How long did it take you to test samples?
3.?How long did it take you to sign a contract?
4.?How long did it take you to accept your first delivery?
5.?Was the first invoice for the exact price you contracted for?
6.?Was the shipping and handling exactly as bid?
7.?Were there and SOW change requests that raised pricing?
8.?What P&L period are you reporting against?
9.?What was the budget for this product or service?
10.?Can you trace the spend to a specific P&L line item?
Can anyone guess what the results of these actions are? Check back with us on?Friday to?find out in Part II. Or,? please contact a SafeSourcing Customer Services Account Manager in order to learn more.
We look forward to and appreciate your comments.