Drives of e-procurement: The primary driver is cost reduction, in this case from an average of £60 per order to £10 per order.In many cases the cost of ordering exceeds the value of the product purchased. In another example, BT'simplementation of e-procurement enabled 95 per cent of all its goods — including desktop computing, stationery, clothing,travel and agency staffand so reduced the average purchasing transaction cost from £56to £40.

companies inbwhich there was a 19 percent difference in profitability between the most successful and least successful companies.Of this difference, 13 per cent was due to differences in the cost of goods sold of which between 40 and 70 per cent wasaccounted for by differ-ences inthe cost of purchased goods and services.Direct cost reductionsare achieved through efficiencies in the process,Process efficiencies result in less staff time spent ins earching and ordering products and reconciling deliveries with invoices.Savings also occur due to automated validation of pre-approved spending budgets for individuals or depart-ments, leading to fewer people processing each order, and in less time. It isa lso possible to reduce the cost of physical materials such asspecially printed order forms and invoices that are important to the process.

There are also indirect benefits from e-procurement, the cycle time between order and use of supplies can be reduced. In addition e-procurement may enable greater flexibility in ordering goods from different suppliers according to best value. This is particularly true for electronic B2B marketplaces.

E-procurement also tends to change the role of buyers inthe purchasing department By removing administrative tasks such as placing orders and reconciling deliveries and invoices with purchase orders, buyers can spend more time on value-adding activities. Suchactivities may include more time spent with key suppliers to improve product delivery and costs or analysis and control of purchasing behavior.