Finance directors look to internet purchasing as key to cost cutting

E-procurement is top of the agenda for cost savings, according to a survey of finance directors in The Times’ Top 500 Companies, compiled by Byline Research.

Considering that at least a third of a business’s turnover is likely to be involved in non-production spending, the survey estimated that e-procurement could achieve net savings of more than 10% for a marginal increase in IT expenditure.

The main motives for e-procurement quoted by the survey were reduced administration (84%) and improved management control (68%).

Some 92% of respondents had e-commerce adoption plans under way. Half the companies claimed they already carried out purchasing over the internet or are using electronic channels like EDI, and three quarters anticipate buying online within the next 12 months.

Though the e-business strategy appeared to be well defined, there were still perceived to be problems in terms of implementation. Half the companies expressed dissatisfaction with existing internal procurement management software.

Some 68% had e-procurement functions as part of an enterprise resource planning system or wider finance system, but only 12% had a purpose-built e-procurement system.

Surprisingly, one fifth have yet to introduce any kind of automated procurement.

* www.bylinegroup.com

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