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Since 1998 many claims and predictions have been
made for ROI's achievable through e-Procurement projects. By mid
2000 these had reached 'between 200% - 400%'. A year later a random
survey of purchasing managers using a consistent assessment model
indicated a potential average ROI of 8% from implementation of e-Procurement
best practice across a range of organisations. What is missing from
all these estimates is a sound basis of factual measurement.
Today, as the first generation of e-Procurement projects should
be starting to deliver measurable savings, the picture as to the
real extent and value of these savings is still unclear. One explanation
for this is that whilst project progress has been measured in terms
of milestone achievement, relatively few organisations are accurately
monitoring the real benefits achieved as the projects progress.
This guideline draws on the experience of BuyIT members and other
early adopters to define those benefits and processes for measuring
them.
No guideline can lay down detailed guidance in an area so heavily
dependent on each company's starting point, structure, culture and
expectations. What this guideline seeks to do is make the case for
measurement, identify some principles and suggest key performance
indicators - what to measure - and monitoring processes - how to
measure it. (A section at the end of the guideline also suggests
a scorecard approach to monitoring the progress of the e-Procurement
programme and a template that can be used for benchmarking.)
One of the great challenges of measuring the ROI is to identify
exactly what benefits the e-Procurement tool brings to the organisation.
Many of these benefits are traditionally seen as 'soft' benefits.
This guideline addresses methods of measurement to make them tangible.
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