Firms bid to cut costs on internet
USING internet auctions to buy supplies can cut as much as a fifth off a company's costs, according to one of Europe's leading e-procurement providers, which has won its first major pubic sector contract with Tees and Durham NHS trusts.
Daniel Ball, business development director for Wax Digital, said the company had seen growth of 30 to 40% in demand for e-procurement services, which include purchase to pay systems and internet reverse auctions.
“There has been a much greater realisation that there are big returns to be had by organisations watching what they are spending rather than chase profit growth.”
Opening up the tendering process to a wider pool of bidders encouraged existing suppliers to “sharpen their pencil” he said.
“Usually, you find the encumbant supplier can lower costs and they invariably end up the winner. It’s also a pretty useful tool from a supplier’s point of view because the tender process is very short and clear and everybody knows exactly where they stand and what their competitors are offering.
“While most organisations have pretty close control over what they buy to manufacture, they tend to neglect their indirect spend. People are catching on to the idea that there’s a big win to be had here.”
The seven-year Tees contract is to provide e-sourcing and a purchase to pay system, handling a £350m annual spend.
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