By Frank Treanor Business Strategy IT & Technology Spend Management Suppliers 10th September 2019

Is your approach to purchasing services costing you more than it should?

When it comes to the procurement of services, we’ve discovered a lot of money is being left on the table. And without visibility of this spend, you might not even realise it.

It’s an industry-wide problem. Even the big-name brands that have invested in state-of-the-art spend management platforms (like Coupa, Ariba, Ivalua, Basware, Jagger, and Trade Shift) are yet to extend automation to the purchasing of services.

And that’s a serious efficiency issue.

 

So why aren’t businesses including services in purchasing automation?

Ultimately, this comes down to services procurement being more complicated than item purchasing, even when you have an agreed rate card in place. Here’s why:

  • Knowing the time and resource needed to fulfil a service can be tricky, which means your buyers (procurement team or otherwise) can’t just raise a requisition or PunchOut to a supplier catalogue.
  • Although useful for a small subset of services spend, web forms aren’t always scalable or flexible enough to handle every type of service.
  • You might be reliant on receiving a detailed quotation from the service provider that includes a breakdown of rate-carded costs and any extras. This is nearly always sent as an email attachment, outside of your P2P system.
  • Once quotes are received, it takes a member of your team, who’s most likely highly skilled and highly paid, to manually create a purchase requisition and add in all of the line-item detail that’ll help you benefit from expenditure analysis further down the line. And that’s a laborious task for someone whose expertise could be better used elsewhere.

All of this makes for a process that’s both time and cost inefficient.


Ok, but what’s the cost to my company?

According to the Chartered Institute of Procurement and Supply, the current national average salary for procurement professionals is around £45,159. When you add to that all of the additional costs of an employee (think recruitment, bonuses, National Insurance, pensions and more), the cost rises to around £80k for a skilled employee.

Let’s crunch that number a little further.

  • If the total cost of a skilled employee is £80k, it breaks down to an hourly cost of around £40.
  • Let’s say it takes about 20 minutes to create a purchase requisition from a supplier quotation. Using the above figure, that works out at a cost of approximately £13 for every purchase requisition.
  • So if you raise 20,000 requisitions for services in a year, the cost to your business comes down to £260k and 5,000 hours. That’s a lot of time and money that could be better spent elsewhere in your business.

You stand to make a significant saving if you automate the quote-to-requisition process for services.

 


So, what’s stopping you?

Until now, very few service suppliers have either the technical capability or the spare capital to access, invest in or build a solution that can connect with your eProcurement system (as well as enabling them to build detailed quotations online!).

The good news is, suppliers can now subscribe to G-Quotes, the online quote-building tool from ProProcure.

G-Quotes connects service suppliers to your eProcurement system, enabling you to automate the purchasing of services. Which means your suppliers can build quotes as they go and send them to your spend management solution using our standardised API integration.

The cost to both you and your suppliers is very low (take a look at available packages here).

And as it’s a monthly subscription tool, you don’t have to keep on using it if it doesn’t meet your needs (although we’re confident it will!).

Ready to fully automate your services procurement, make purchasing easier and boost productivity? Contact us today to find out how your business can benefit from connecting G-Quotes with your eProcurement system.

 

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