Why e-procurement? The financial justification

The positive outcomes of e-procurement have been documented time and again by international research – and yet studies also show that user resistance is one of the most persistent barriers experienced by organisations making the change.

The first thing to acknowledge is that this scenario is far from unique to the purchasing industry.

The implementation of any new software solution, often proves a lot trickier than businesses anticipate. Initial optimism over a new system can give way to frustration and disappointment as buy-in from those with purchasing responsibility proves illusive and the hoped-for cost and efficiency benefits fail to materialise.

While there is typically no single reason why e-procurement adoption fails, there are commonly recognised factors that determine if and to what extent the implementation process of software is a success. And in this blog series we will explore five of them…

1. Financial Justification

Clarity on the bottom-line rationale for adopting and deploying new software solutions is of paramount importance. Among the questions firms ought to be asking of themselves are:

  • ‘what are the advantages of the new system over that which we have at present?’;
  • ‘how exactly will the new system add value to our operations?’;
  • ‘how will we measure this value?’;
  • ‘what is the opportunity cost of investing in new software?’;
  • ‘what return on investment do we aim to achieve?’

Having a sound business case for the adoption of a new eProcurement software solution ensures a greater sense of focus and purpose throughout the implementation process. Moreover, it means that firms are more likely to stay the course and not be deterred when the inevitable glitches and teething problems surface.

Next up…Project Championing and Consultation and Buy-in.

The five critical success factors of e-Procurement and twelve other aspects of effective e-Procurement adoption are explored in full and available free-of-charge in the latest SourceDogg whitepaper Converting to e-Procurement – 17 Aspects of Successful Adoption.

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