The benefits of e are misunderstood

A failure to fully understand and utilise e-procurement could be costing British companies their competitive edge.

New research commissioned by partners Xoomworks, Ariba and Dell has identified that a failure to fully understand and utilise e-procurement could be costing British companies their competitive edge.

In a nationwide survey among finance and IT directors of 350 mid-market companies with an annual turnover exceeding £70 million, more than half of those surveyed (53%) cited an absence of awareness as the key reason why so many companies are presently failing to exploit the potential of e-procurement.

This figure was compared with 12% of respondents who considered the software too expensive, 11% who believed that the process was too complex, and 7% who thought that the available software was insufficiently sophisticated.

‘Surprisingly, of those mid-market companies yet to embrace e-procurement, their lack of action is less to do with the sophistication of the software itself or its cost, and more to do with the fundamental lack of understanding of what it can achieve in terms of business benefits to the organisation.’ said Steve Jackson, chief operating officer, Xoomworks.

‘This study shows there is still a lot of ground to cover in the UK in explaining the benefits and dispelling the myths surrounding e- business,’ said Ferdi Roberts, UK Managing Director, Ariba. ‘In particular it’s clear some businesses aren’t fully aware of how an e-procurement solution, like Ariba’s, can significantly enhance their bottom-line – even in today’s economy.’

‘In a tougher economic climate, the low-cost producer will ultimately be the winner,’ said Dan Thomas, E-business Market Development Manager, Dell UK. ‘By enabling our supply chain, we have consistently been able to drive low-cost material from the supplier, through the supply chain, and to the customer. This has allowed Dell to continue to be profitable, and we have seen the real business benefits our customers of all sizes have achieved through the Internet enabling their procurement process.’

Take up of e-procurement in the enterprise market is accelerating fast, but mid market organisations are now able to take advantage of the same cost savings as the larger multi-national organisations.

‘Everyone can benefit from e-Procurement – return on investment is typically achieved in less than a year and affects the bottom line directly, giving organisations a significant competitive edge.’ concluded Jackson.