Case studies show that firms are likely to recoup their investment cost when implementing a cloud based spend management system, so why aren’t more leaping at the opportunity?
Once implemented, spend analytics show that savings will accrue from lower transaction costs and reduced purchase prices.
Considerable savings accrue from electronic payments rather than manual processes. This, taken together with the reduction in paperwork, the elimination of human error in processing orders, cutting down a large chunk of the paperwork associated with Tenders and thereby reducing man hours, all add up to considerable savings for any organization.
A cloud based system goes one step further, running systems in the cloud reduces the need for costly servers, maintenance, updates, back-up and networking costs as physically points of hardware and software run around the building or departments. Subscriptions are linked to the number of users, making it very economical to run; running a cloud based spend management system allows users to collaborate easily and efficiently when working on joint projects. Sharing facilities in the cloud, supported by encrypted data and extra levels of security to guarantee protection against hackers, both supports the reduction in running costs of IT and increases speed, efficiency and flexibility.
While running a cloud based spend management system will not in itself directly reduce transactional prices, it will facilitate the process through directing users to current suppliers where there exists a pre-negotiated agreement on pricing thus achieving economies of scale, and it can facilitate the onboarding of new and existing suppliers in the Request for Tender, Quote, Information or Proposal process and this will result in increased competition thus facilitating reduction in pricing.
A cloud based spend management system allows for quick and easy transfer and updating of data which is directly linked with the ability for spend analytics to assess who is buying what in the organization, tracking and monitoring spend patterns. This is one of the most powerful advantages of implementing a cloud based spend management system – the ability to gain visibility and control over spend.
For further indepth information on this aspect of implementing a cloud based spend management system, request a copy of the White Paper, “Gaining Visibility & Control of complex expenditure”.
Also, take a look at What is eProcurement for a definition of eProcurement and some of the key benefits associated with eProcurement.