Thanks to a high prevalence of runaway projects which are late and over budget, enterprise resource planning (ERP) is no longer the flavour of the month in IT circles. A main driver behind IT purchasing decisions is now cost reduction as organisations struggle to achieve the payback anticipated from expensive ERP implementations.
That`s the view of John Day, General Manager for SA, who says companies are now more likely to optimise the potential of their existing software and integrate it wherever possible with specialised solutions.
Day was hosted in SA recently by , the exclusive local authorised distributor of CedAr`s eFinancials, e5 and Elevon 2 financial software. CedAr Software is the UK`s largest provider of financial, e-procurement and performance management solutions to medium and large enterprises.
"There is a growing demand for e-procurement solutions which can be implemented quickly based on known project scope and budget, and which satisfy the business needs," Day says. "By simplifying the management of the procurement process, these solutions save time and money by elevating collaboration to real time, turning suppliers into partners.
"An effective e-procurement solution radically improves inventory management, accounts payable and procurement processes."
According to Day, many organisations embark on e-procurement projects to contain costs. So-called maverick buying is inevitable in most large companies, but the resulting expenses can be reduced by implementing a corporate e-procurement solution. In the present economic climate, growing a business by increasing sales is increasingly challenging; it is far more realistic to improve profitability by cutting costs.
"The average cost of processing a purchase order, from requisition to commissioning the cheque, is R54. That drops to about R5.80 with an e-procurement solution," Day says.
As with ERP, it`s possible to invest upwards of R50 million on a new end-to-end procurement system - hardly worthwhile to reduce the cost of paper clips, particularly if the company`s procurement issues and processes are not simultaneously re-engineered. To avoid falling into the same old trap, Day recommends automating processes for specific functions in the organisation.
"It`s far more cost-effective to automate those procurement activities where savings are immediately tangible, such as the processes for acquiring temporary staff, employee expense claims and customised business stationery," he points out. "CedAr has developed granular software solutions which enable organisations to pick and choose, and all our solutions integrate fully with the customer`s existing financial, manufacturing and HR systems to create a best-of-breed environment."
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