© 2011 Sixhills Consulting LtdWhilst substantial savings in purchased costs can be delivered by Sourcing, they may erode with time unless fundamental process changes are also made. e-Procurement and Sourcing together can offer very substantial savings that also sustain over timeImpact of Timing on SavingsExpense as Percentage of Original BaselineKey Conclusions• Sourcing delivers significant short-term savings that tend to erode if existing manual processes and behaviours continue, and new processes and contracts do not take hold within the organisation• On their own, e-Procurement savings tend to be smaller but sustain over time• Sourcing, in conjunction with e-Procurement, delivers lasting high impact savings• Implementation costs are limited to the short-term when sourcing and e-enablement are undertaken jointly• e-Procurement investment needs can be wholly funded by savings identified from Sourcing in one or more categoriesSource: MMG analysisSavingsImplementation costsSavingsImplementation costs100%10%20%90%80%70%Year 1Year 2Year 3e-Procurement only savingsSourcing only savingsSourcing and e-Procurement savings Sourcing and e-Procurement costs e-Procurement costsSourcing costs TimeB2B PerspectivesP5
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