Executive Briefings

Automating Procurement Process in Small and Mid-Sized Businesses Can Bring Huge Savings

The savings that can be retrieved by automating and rationalizing approval and purchasing processes in small and mid-sized companies are palpable. A 2009 Aberdeen Group study estimated that "improving the percentage of all non-payroll, tax, tariff and fee-related spend" - that is, indirect, nonstrategic expenses - brought under the management of a dedicated group can help enterprises "achieve a 5% to 20% cost savings for each dollar brought under spend management".

But the real value, says Kristen Lampert, corporate-services manager at specialty-investment bank Ziegler, is de-risking organizational spending by making sure the approval chain has the right people weighing in on the right things.

When Lampert took over the corporate-services department at Ziegler in 2010 - a team responsible for managing logistics, purchasing, and events - she couldn't afford to waste time and effort on inefficient processes: the unit had been downsized to three full-time employees. In addition, Ziegler's approval and bill-paying processes were all paper-based. "We're over 100 years old," says Lampert, "and we had 100-year-old processes." There was no visibility across the firm, she says. Expenditures were authorized by the wrong people, and the company didn't have a risk-management component in place.

As an example, she said, an invoice for a software service was approved by multiple, siloed business units. That led to the bank paying for some services that were supposed to have been canceled.

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Keywords: value chain IT, supply chain management IT, rationalizing procurement processes, supply chain solutions, supply chain systems

But the real value, says Kristen Lampert, corporate-services manager at specialty-investment bank Ziegler, is de-risking organizational spending by making sure the approval chain has the right people weighing in on the right things.

When Lampert took over the corporate-services department at Ziegler in 2010 - a team responsible for managing logistics, purchasing, and events - she couldn't afford to waste time and effort on inefficient processes: the unit had been downsized to three full-time employees. In addition, Ziegler's approval and bill-paying processes were all paper-based. "We're over 100 years old," says Lampert, "and we had 100-year-old processes." There was no visibility across the firm, she says. Expenditures were authorized by the wrong people, and the company didn't have a risk-management component in place.

As an example, she said, an invoice for a software service was approved by multiple, siloed business units. That led to the bank paying for some services that were supposed to have been canceled.

Read Full Article


Keywords: value chain IT, supply chain management IT, rationalizing procurement processes, supply chain solutions, supply chain systems