We’re pleased to announce the latest Fraxion collaboration with Amazon Business: Punch-in.
What’s there to know about the requisition process?
We recently sat down with our CEO to find the answers to five of the most common questions we’re asked about the requisition process. Here’s what he had to say:
1. Why is speed so important in the requisition process
The faster you’re able to purchase something, the sooner you’re able to move closer to reaching your goals. A recent study found that the strongest organizations are able to complete the requisition process in as little as five hours—just slightly more than half of a business day. That’s compared to slower-moving organizations that can take as long as 15 hours to submit purchase orders. According to this data, best-in-class organizations are three times faster than their more lethargic counterparts. Any way you look at it, that’s quite the competitive advantage.
2. What’s the easiest way to speed up the requisition process?
The easiest way to speed up the requisition process is to update the organization’s approach to procurement. If, for example, purchasing managers are still relying on clunky spreadsheets to manage procurement, it’s time to upgrade to a modern e-procurement solution. Not only does doing so streamline the entire requisition process, it also translates into cost savings and increased employee engagement. Who doesn’t like using the latest technologies that make their jobs easier?
3. What factors slow down the requisition process?
Very generally, the requisition process is slowed down by organizations that have used the same procurement procedures for quite some time. Technology has evolved drastically over the last 10-plus years. Yet many organizations today are still using the same approach to purchasing that they used a decade ago. The most common factors that slow down the requisition process include: using an archaic spreadsheet- or paper-based system to handle procurement; requiring several signatures to authorize every purchase, including routine ones; working with inefficient vendors that are incapable of moving quickly; and just generally doing things manually that can be automated.
4. How much money can organizations save by streamlining requisition?
No matter how big or small an organization is, it stands to save considerably by streamlining the requisition process. According to a recent CEB study, the average large firm loses $14 million each year due to poor procurement strategies. The bigger the organization, the more money it stands to save by streamlining the procurement process and making sure it’s as efficient as it can possibly be.
5. What are the other major benefits of optimizing the requisition process?
There are a host of major benefits that companies can enjoy when they optimize their procurement processes. For starters, companies that optimize the requisition process can gain complete visibility into procurement—something that a majority of organizations admit they do not have. As a result, optimizing the requisition process gives organizations a competitive advantage, allowing them to operate more efficiently and provide more value to their customers.
An optimized requisition process also allows companies to identify and eliminate—or at least reduce—rogue spending. This is important: If you think your company doesn’t have a rogue spending problem, you’re wrong. One study indicated that 54 percent of employees have gone rogue before—meaning they’ve bought something without proper authorization. With full visibility into the procurement process, organizations are able to rein in maverick spending considerably. This is big news, because a 5 to 10 percent reduction in maverick spending can translate into millions of dollars in cost savings for the average organization.
Another big benefit is increased productivity. When the procurement process moves faster, employees are able to invest their time and energy on other mission-critical business functions instead of having to keep checking in on that status of a purchase.