Sasol, a South African petroleum company and customer of Commerce One South Africa - Distributor Operations, is one of ten leading companies profiled in a new benchmarking report by independent market analysis firm Aberdeen Group. The report defines e-procurement best practices in Europe, Middle East and Africa (EMEA), highlights successful e-procurement techniques and demonstrates significant return-on-investment figures for organisations implementing new technologies.
According to the Aberdeen report, organisations implementing e-procurement strategies and technologies have reduced their purchasing costs by up to 75%. In addition, the research indicates that European companies are using e-sourcing and e-procurement simultaneously, unlike the US where indirect procurement is usually followed by e-sourcing at a later stage. European companies utilising e-sourcing generally show substantial cost savings with an average savings rate of between 12 and 15% per year.
The report identifies best e-procurement practices critical to achieving cost savings for organizations, such as thorough business processes investigation prior to implementation and strategy and speed of deployment. Additionally, the report cites the use of e-procurement as a revenue-generating tool for the customer including improved supplier relationships, defined classification standards and helping partners with logistics cost management.
Criteria for choosing the ten profiled companies included evidence of return-on-investment, quantitative and qualitative savings, as well as an innovative use of technology, which is where South African petrochemical company, Sasol, came to the fore.
Sasol embarked on its e-business initiatives in 1999, and when Commerce One South Africa - Distributor Operations launched the regional online marketplace, MarketSite Africa in February 2000, the company took an equity stake in MarketSite Africa. With future participation in the marketplace in mind, Sasol licensed Commerce One`s procurement solution to ready the organisation for e-commerce and integrate with Sasol`s complex legacy environment. Commerce One`s technology, global reach and extensive customer base fit Sasol`s requirements to streamline all of its buying and selling processes worldwide.
Sasol has achieved substantial cost and time savings including reducing its pay cycle from 29 days to 8 days, an improvement of 72 percent. Sasol has saved approximately 1.5 million Rand in annual indirect spend of 2 billion Rand and has improved invoice accuracy allowing for tremendous savings in invoice reconciliation costs. The company is now looking at a further rollout to its remaining business units and international subsidiaries in Germany, Italy, and North America.
"Sasol has successfully taken steps towards realizing the opportunities of e-commerce," said Tim Frost, new business development director, Commerce One South Africa - Distributor Operations. "We look forward to continuing to work with Sasol to drive additional efficiencies throughout its purchasing system."
Other companies that have been profiled include SAP AG, Mercedes Benz Espana, Belgacom, Dresdner Bank, Endorsia, Exel, GlaxoSmithKline and TRW Aeronautical Systems.
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