The Expected and Real Impacts of Procurement Tools: Studies and Stories

Procurement tools automate and streamline purchasing processes, reducing costs and improving financial performance. Features include automated procurement, strategic sourcing, spend analysis, and supplier management. These tools help organizations manage procurement activities, mitigate supplier risks and improve overall performance, as evidenced by cost savings statistics and user success stories.

Procurement tools are software solutions that automate and streamline the purchasing process for organizations. These tools can help organizations to effectively manage their procurement activities, reduce costs, improve financial performance, and mitigate risks associated with suppliers. Some of the key features and capabilities that one can expect from major procurement tools include:

Automated procurement processes: According to a study by Deloitte, automation of procurement processes leads to cost reduction of up to 60%. Procurement tools can automate many of the manual processes involved in purchasing goods and services, streamline RfX management and direct materials management, and reduce time and resources required for the procurement cycle.
Strategic sourcing: A study by Spend Matters found that strategic sourcing can lead to cost savings of up to 15%. Procurement tools can help organizations to identify and select suppliers based on factors such as cost, quality, and delivery. By conducting a thorough analysis of the market and identifying the best suppliers for specific goods and services, procurement tools can help organizations to negotiate better prices and terms with suppliers, resulting in significant cost savings.
Spend analysis: A study by Gartner found that spend analysis can lead to cost savings of up to 12%. Procurement tools can also help organizations to analyze their spending data to identify areas of opportunity for cost savings. By understanding where an organization is spending its money, procurement tools can help organizations to identify areas where costs can be reduced and negotiate better prices with suppliers.
Supplier management: A study by Aberdeen found that supplier management can lead to cost savings of up to 10%. Procurement tools can help organizations to effectively manage their suppliers. This includes assessing the financial stability of suppliers, their ability to deliver goods and services on time, and the quality of their products or services. By identifying and mitigating risks associated with suppliers, procurement tools can help organizations to ensure that their operations are not disrupted.

Here are some user stories that demonstrate the benefits of procurement tools:

As a purchasing manager for a manufacturing company, I was able to automate our purchasing process using procurement tools, which helped us to reduce the time and resources required to purchase goods and services and improve our financial performance by reducing costs.
As a procurement specialist for a healthcare organization, I was able to implement a procurement tool with strategic sourcing capabilities. This helped us to identify and select suppliers based on factors such as cost, quality, and delivery, resulting in significant cost savings and improved overall performance.
As a finance manager for a construction company, I was able to use a procurement tool with spend analysis capabilities to analyze our spending data and identify areas of opportunity for cost savings. This helped us to negotiate better prices with suppliers and reduce costs, which improved our financial performance.
As a logistics manager, I was able to use a procurement tool with supplier management capabilities to effectively manage our suppliers by assessing their financial stability, their ability to deliver goods and services on time, and the quality of their products or services. This helped to mitigate risks associated with suppliers and ensure that our operations were not disrupted, which improved our overall performance.

In conclusion, procurement tools can provide a wide range of benefits to organizations, including automated procurement processes, strategic sourcing, spend analysis, and supplier management capabilities. These tools can help organizations to effectively manage their procurement activities, reduce costs, improve financial performance, and mitigate risks associated with suppliers. These are proven by facts, statistics and user stories.

FactWise Source-to-Pay is modular (Source-to-PO and Procure-to-Pay), and accounts for batch production, goods receival workflows and quality checks following complex RfX management and strategic sourcing. Our current users find it very intuitive and efficient (create Rfx<1min) and love the dynamic and historic insights into supplier performance it offers. Teams can start using FactWise with their data immediately, and if required, we can seamlessly integrate with ERP or other systems within the month. 

Our mission at FactWise is to delight users and provide sustainable positive impact to the organizations we serve. We are committed to generating win-win outcomes for buyers and suppliers globally.

Stawan is the founder and CEO of FactWise. Before founding FactWise, Stawan was the NA TMT-Procurement Leader at McKinsey. Passionate about procurement, Stawan has 15 years’ experience in enabling clients of all sizes to achieve business impact via procurement.