14 FEBRUARY 2001 - The success of the eProcurement revolution is in jeopardy because a vital piece of the puzzle is missing. An ePayables capability is conspicuously absent from systems sold under the eProcurement flag today.
According to Tranmit, the only vendor with a proven ePayables solution, this issue threatens the success of shared financial service initiatives and other corporate schemes aimed at cutting procurement costs and improving efficiency.
"eProcurement vendors typically claim to be able to support end-to-end automation of the procurement process, but I would advise customers to treat these claims with scepticism. What they really mean is that they cover the stages from requisitioning to placing the order. What happens after that is left to chance," said Shane Hussain, business development director at Tranmit.
ePayables is the last stage in the procurement process from receipt of invoice to payment. Whether the invoice is presented as an electronic document or on paper, the Accounts Payable department has to be able to match it against the original purchase order and route it to the appropriate manager for approval in the event of an anomaly.
Research has shown that most European businesses do not expect to eliminate paper from financial processes for at least another 10 years.
"We’re not saying that existing eProcurement products don’t produce cost savings, but they simply don’t solve the problems, but shift them into the accounts payable function. They completely ignore the costs of invoice approval and payment authorisation, yet automating these areas can half the cost of processing an invoice - Tranmit clients have more than doubled productivity in AP by using Sprinter.
Businesses operating from multiple locations, including multinationals, are embarking on shared financial services programmes - schemes aimed at streamlining and centralising the finance function. They expect to make cost savings by closing regional or local AP departments and efficiency gains by delivering more timely and accurate management information.
"Finance directors are under pressure from the board and investors to deliver these programmes and are being encouraged by overzealous marketing to believe that eProcurement vendors can provide the tools for the job. Until these vendors can also address the ePayables function, this simply isn’t true. It’s like getting a taxi home only to find that driver won’t take you within five miles of your front door," Hussain said.
"It stands to reason that the full benefits of automation of any process only materialise when all stages of the process have been addressed. If the payables function is missing from the equation then the benefits available from eProcurement will be limited at best."
Tranmit’s Sprinter Invoice Approval module has been successfully deployed by MSAS Global Logistics and is now available as standalone application -- and several new customers are soon to be announced. . The software is also sold as part of a complete eProcurement suite that includes Trinity Mirror, Sony Music Europe andSmithkline Beecham among its customers.
Tranmit is the UK’s leading provider of integrated eProcurement and ePayables applications.. Sprinter Invoice Approval is part of a family of products that allow businesses to automate and audit the purchase to pay cycle while exploiting the benefits of internet based e-commerce. Tranmit’s customers include Sony Music, SmithKline Beecham, Trinity Mirror and Fisher Frozen Foods. Tranmit is based in Andover, Hampshire. For further information visit http://www.tranmit.co.uk
T: 01618 604015
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