I was recently asked to perform an exercise to see if it were possible to cut costs in our procurement department it turned out that it was costing us about $36 for every purchase order that we issued out of our business Management felt there was a cheaper way to deal this so we investigated automation via software.

We looked at the flow of data through our business and discovered bottle necks both in the approvals process and in the communications with our vendors. After suitable study we searched the purchasing software marketplace for a system that could alleviate the issues we were facing. We found several purchasing software tools, and some were clearly not up to the task but one or two did rise above the rest in terms of functionality and cost benefit.

The purchasing software system we chose, called eProProcure (from Mikrofax eProcurement Solutions) had a unique approval routing method for cost control plus a sanity check step so that all our line managers suddenly had self control of their budgets they could see at a glance what they had spent to date and what was left of their budget to still spend.

Our CEO and Finance director loved that ! Also there was a much tighter audit of who was doing what on the system and our Sarbanes Oxley compliance guys loved that ! But a surprising spin-off benefit was that our suppliers were also happy as they could now receive their orders and update their prices on-line into our system directly this meant we were sending out our orders much faster due to the electronic delivery and more accurate orders due to the prices being always correct on the internal catalogs.

Our internal expenses for producing an order has now shrunk to about .10 cents and the PO turnaround time has shot down ; all in all a win-win situation.