The Route to Better Procurement

Improvements in purchasing systems transcend cost savings, and companies are seeing the benefits extend to every corner of the business.

Managing procurement has never ranked as a glamorous endeavor. It doesn't elicit the excitement of a new technology rollout or the satisfaction of landing a new customer with deep pockets. Yet in today's cost-conscious and productivity-driven business environment, efficient procurement can serve as an engine for economic gain.

Brett Mauser is well aware of that fact. Five years ago, the director of global procurement for Dayton, Ohio-based NCR Corp. faced a mountain of paper, disparate systems, overlapping requisition processes and costly buying patterns. For an organization that spent $3.3 billion annually and conducted business in more than 100 countries, "there was an enormous opportunity to drive improvement," he explains.

Today NCR, a provider of transaction and data warehousing products, is a model of efficiency. By linking order management, inventory controls, warehouse management, contract management, purchasing, travel and entertainment (T&E), accounts payable, and other activities, NCR has created visibility and accountability. Moreover, the Web-based invoicing and electronic data interchange (EDI) system that the company put into place has helped streamline buying. More than 70 percent of the company's suppliers now use this mode. The switch to online invoicing lowered costs from $14 per invoice to near zero. At the same time, the number of invoices flagged for review or manual handling has plummeted from 70 percent to 20 percent.