Challenges in E Procurement Adoption in Europe


By: S.Sudalai kannan -- Senior Research Analyst

31 March, 2014

Challenges in E Procurement Adoption in Europe

Introduction: Although Europe is considered among the developed economies but still E Procurement adoption rate is low when compared with equally developed countries like United States. Benefits reaped in practicing E Procurement, Challenges faced in E Procurement adoption by various industries (Large industries and Sme?s) and European Union measures taken in improving adoption rate are discussed in this paper. Main reasons for low adoption rate among large scale industries in spite of availability of various resources (skilled professionals) are the main focus of this white paper. Problem Statement: Due to the downturn in the Economy companies are trying to trim the trans-fat by optimizing spend, increase visibility and improve overall efficiency. Supply chain and procurement activities once overlooked now gains importance. E Procurement is one such area which is gaining momentum in recent days due to potential savings. Organizations spend about 20 trillion on services and procuring goods externally on a global basis. Any efficiency improvement or spend reduction measures will improve dollar to dollar savings. However in spite of various benefits companies face challenges in adapting E Procurement solutions due to various factors which differs from Sme?s to Large Enterprises. Savings from E-Procurement: Companies are finding ways to reduce and optimize spend. By adapting E Procurement, E invoices are used instead of paper invoices which not only bring huge savings but also improve integration and automate the process. Processing a paper invoice in Europe will cost around 1.13 euros to 1.65 euros whereas E invoicing processing charges vary between 0.28 euros to 0.47 euros. A cost reduction of approximately 70 to 75% can be obtained. According to European Associations of Corporate Treasurers. Companies could save 80% of the current cost adapting to E-invoicing which reduces the manual work involved, reduces time, and improves responses.


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