© 2011 Sixhills Consulting LtdSustaining Sourcing and e-Procurement SavingsIn a recent client example, the value of cost reduction from purchased goods and e-enabled process improvements was eight times the savings achieved by process improvements alone Source: International Data Corporation; MMG analysis351555502502,2302,5252,470TotalPurchasedExpenseTransactionCostCurrentSystemCostTotalProcurementCostE-ProcurementSystemCostsReducedInventoryCostReductionofTransactionCostSavingsfromPurchasedGoodsFinalSpend2. Annualised Savings Potential$ MillionThe Reality of Benefits Promised by e-Procurement1. Industry Benchmarks8:1 ratio between savings from purchased goods and process cost savings compared to process cost savings aloneTransactionCostCycleTimeComplianceInventoryCost ofGoodsTraditional /Manual$107 per order requisition7.3 days70%100%100%e-Procurement$30 per order requisition2 days95%20% to 50% reduction5% to 10% reductionIllustrativeIllustrativeClient ExampleClient ExampleB2B PerspectivesP4
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