Have you ever calculated the cost of doing procurement using ‘manual’ business processes in your business?

The assessment

Calculate a projected cost to your business by running ‘manual’ / time intensive procurement processes and not utilising an e-procurement platform or having business tools with ‘electronic’ supplier catalogues, an automated approval workflow system, or guaranteed PO delivery to suppliers.

The calculation

The calculation for the projected existing cost to potential clients with ‘manual’ procurement processes is based on an estimated overall 4 hours it takes for a client to perform all of the following tasks:

The projected cost could then be calculated on the number of hours spent on the procurement process out of an average total of 120 hours a month for an employee that earns, say, R10 000 per month times by number of orders.

The formula is as follows:

10 000/120 = R 83.34 per hour
R83.34 * 4 = R 334 cost per order (this is the client cost without utilising the mymarket.com platform)