One application can reduce one of your company's greatest expense points. For large, global companies, which typically spend hundreds of millions of dollars a year on nonproduction supplies, that can mean huge savings, making the cost of the systems almost trivial. Federal Express Corp. of Memphis, Tenn., has installed Ariba's Operating Resource management System. Since online procurement centralizes all purchasing policies, such as which vendors employees must use, he can switch all purchases of certain items to vendors that are overstocked or running one-time discounts on their inventory. This is just the beginning, IS executives say.
Employees can work more quickly and focus their attention on more strategic tasks.
Efficiency Gains Calculating savings from volume discounts is simple math, but money saved from the reduction of time spent by employees on the purchase process is one of the most difficult costs to quantify. But even given such leeway for the innately inexact estimation of time costs, Diamant-Berger and other IT professionals say the ROI of online procurement systems easily outshines most other enterprise software investments. Redshaw, for example, says Ariba's Operating Resource Management System is showing a return on investment three times the benchmark FedEx uses for approving an IT project, which the company declined to disclose. That function centralizes and consolidates the purchase to a select few vendors, eliminating the need for employees to pick up the Yellow Pages or drive to a store to search for the items they need.