Companies can reduce their total purchasing budget by up to 8.5 percent by buying online, according to an IDC (a sister company to CIO’s publisher) study published in 2001 on e-procurement applications. E-procurement is the use of the Internet by buyers and sellers to access and exchange large amounts of data for B2B e-commerce transactions.How Does Your Company Compare?profile: Compaq Computer Corp.Revenue 2000: $42.4 billionAnnual spending on indirect goods and services: $6 billionNumber of employees using e-procurement applications: 4,000 worldwideCost to process a purchase order before e-procurement: $167Cost to process a purchase order using e-procurement: $84Percent cost reduction per purchase order: 50 percentBest Practices1. Understand the costs of software. The biggest expense associated with implementing e-procurement is on the software and licenses, which can run between $100,000 and $1.5 million, says Pang. Companies that choose to have e-procurement hosted offsite by an ASP can expect to pay between $10,000 and $20,000 per month. 2. Use e-procurement for your indirect material purchases. Companies will see expenses drop in the short term more dramatically by purchasing indirect materials and products such as office supplies. Purchasing direct materials has already been automated to some extent by most companies and by EDI and other technologies. 3.Work with an experienced e-procurement supplier and an application that can scale to a large number of users, suppliers and partners. Your vendor should provide an easy process to Web-enable your suppliers as well. “E-procurement technology is still pretty new,” says Pang.IDC Analyst Albert Pang says that less than 10 percent of all business procurement today is conducted online. Related content BrandPost What’s next for network operations Broadcom: 2023 Tech Trends That Transform IT By Serge Lucio, Vice President and General Manager, Agile Operations Division Mar 20, 2023 8 mins IT Leadership Networking BrandPost Digital transformation obstacles: Stubborn challenges, what to do about them Value Stream Management is an increasingly essential approach to strategic transformation initiatives. To help teams more fully capitalize on the opportunities it presents, Broadcom is holding its third annual VSM Summit. By Marla Schimke, Head of Product and Growth Marketing, Broadcom's Enterprise Software Division Mar 20, 2023 3 mins Devops Software Development Feature CEO directives: Top 5 initiatives for IT leaders As organizations change course with economic gyrations, collaboration between IT and business becomes priority No. 1 for CEOs. By Stacy Collett Mar 20, 2023 7 mins IT Leadership Feature Topgolf Callaway tees up digital transformation for global expansion As Topgolf Callaway Brands transitions from focusing on manufacturing golf equipment to integrating its apparel and technology acquisitions, digital transformation is helping drive its future. By Thor Olavsrud Mar 20, 2023 6 mins Digital Transformation Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe