Paystream Voices » Electronic Procurement: New Hope Beyond the Hype

Electronic Procurement: New Hope Beyond the Hype

Posted in PayStream Analyst, Purchase to Payment, Contributed, Voices by Sushmitha Koka on September 7th, 2007

Electronic procurement – or e-procurement as it was known during the heydays of the dotcom era, when it was fashionable to use the “e” word with everything – has experienced an interesting lifecycle. In the e-procurement space, organizations have seen everything from hype to horror and now acceptance and even growth. During the late 1990s and early 2000s, owing to the maturation of Internet technologies and the astronomical growth of the Web to conduct business, almost every organization has “automation” on its corporate agenda, and e-procurement appeared to be a good place to start.

A plethora of procurement automation solutions cropped up in the marketplace and organizations were rushing to implement these in the hope of achieving tremendous cost savings, enhanced spend managed capabilities and improved supplier relations. Unfortunately, not every adopter of e-procurement saw the anticipated benefits materialize. The biggest stumbling block faced by these early adopters was their inability to entice suppliers to jump onboard the automation bandwagon. As is the case with most automation solutions – that aim to improve the exchange of information and funds between trading partners – getting suppliers to invest in the technology and change their business processes is never easy.

However, organizations learned a big lesson; technology cannot be the be-all-and-end-all of an automation initiative, rather it is just an enabler. The key to a successful e-procurement program lies in the redesign of the procurement process and a strong strategy to leverage the available technology to meet each organization’s specific business requirements. Research from PayStream Advisors is uncovering an renaissance of interest in Web-enabled procurement solutions – especially applications that have been enhanced by purchasing cards, approval workflow technologies and integration with online vendor catalogs. Results to PayStream’s Financial Automation Survey (FAS) revealed that 23 percent of respondents are already using an e-procurement solution, while another 4 percent and 22 percent respectively are in the deployment and planning stages.PayStream is developing a Technology Insight Series report in the Electronic Procurement space, which will be available through our website in October 2007.

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