You’re a procurement manager who’s always trying to make your department more efficient and more profitable. For years, you’ve had your sights set on investing in a modern e-procurement platform that will give you and your team complete procurement visibility.
There’s a problem: It’s hard to get upper management to sign off on anything these days.
Your company has been using the same procurement system for several years now. Management believes that because you’re still open for business and able to provide value to your customers, nothing needs to be fixed.
But as they say, you need to spend money in order to make it—or in this case save it. You know that having a modern procurement solution will enable you to have full visibility into your purchases—which will provide you with a number of benefits in due time.
So how, then, can you get the buy-in you need to convince management it’s time to upgrade your procurement system—thereby optimizing your purchasing department?
Here are four arguments you can make to convince management that such an investment is not only smart—it’s a necessity.
1. You’ll save the company a lot of money over time.
With a new procurement platform in place, your company will gain full visibility into purchasing. Over time, this will translate into significant cost savings for several reasons:
- Fraud. Nearly 41 percent of purchasing managers believe that fraud is a major problem at their organizations. This problem is most noticeable at companies that are using outdated paper-based systems or spreadsheets to manage procurement. With full visibility into procurement, it’s much easier to identify fraud. Additionally, workers will think twice—or even three times—before even trying to submit a fraudulent purchase.
- Rogue spending. Rogue or maverick spending occurs when an employee buys something without going through the proper authorization channels. When this happens, organizations are forced to absorb these expenses even though they’re unbudgeted. Believe it or not, 54 percent of employees say they’ve gone rogue before. With a new procurement system on hand, your organization will definitely reduce the amount of rogue spending you incur. This is a big deal; a 5–10 percent reduction in rogue spending can translate into millions in savings.
- Better deals. With a clear view into which department is spending what—and which vendors they’re dealing with—it’s much easier to determine whether you’re getting the best deals and taking advantage of every available discount.
Every company wants to save money. So you may be able to convince management to invest in procurement with this point alone.
But if you need to fortify your argument even further, we’ve got you covered.
2. Employee engagement will increase.
The best and brightest workers always want to use the latest tools on the market.
You can’t expect to attract the most talented procurement professionals if you’re relying on an outdated legacy system to manage purchasing.
By investing in a modern platform, you can expect employee engagement to increase. As a result, productivity will improve and customers will be more satisfied because of the happier workforce that’s serving them.
3. The company will move a lot faster.
Businesses that have mastered procurement management are able to submit purchase orders within five short hours. Companies at the other end of the spectrum can take as long as two days to do the same thing.
With a new procurement system on hand, you company can move much faster than your competitors. This helps you better serve your customers and bring products to market that much quicker.
4. Reduce cash flow stress
Procurement systems enable you to easily gauge inventory levels—making it that much easier to know when you need to order new supplies. That sure beats accidentally stockpiling too much inventory and tying up all your cash in the process.
In other words, e-procurement systems help increase working capital. You’ll only spend money when you have to—not a moment sooner. With more cash on hand, your company can quickly respond to exciting opportunities that materialize.
You can also use a modern e-procurement system to stretch out your accounts payable as long as possible. Never worry about settling your bill 10 days before it’s due again. It’s all automatic.
To learn how to make an even better business case for investing in a new procurement system, download our new e-book, The Complete Guide to Achieving 100% Procurement Visibility.