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Yesterday, we posted a blog about the first step in increasing your ROI, replacing your paper billing.  Today we'll share the second step.

 

Step 3: Measure Your Results

Another key step is to track your results and compare them to industry benchmarks so you can determine the effectiveness of your e-ordering and e-invoicing capabilities.

What will it give you?

  • A clear picture of the business value you’re realizing through e-commerce
  • Awareness of areas where you need to improve
  • Facts and figures that help build internal buy-in for ongoing e-commerce initiatives

How do you do it?

Conduct a “before and after” set of measurements for customers with whom you implement e-commerce. Compile pre-e-commerce information on various KPIs (key performance indicators) to get a benchmark, then measure your results again after 12 months. Below are some suggested KPIs to use:

  1. E-ordering via Ariba portal
    • Basic KPIs:
      1. Percentage of POs received through e-commerce vs. other methods
      2. Percentage of POs with errors, by mechanism (e.g., phone, fax, portal, electronic)
    • More advanced KPI:
      1. Time required to resolve PO errors, by mechanism
  2. E-invoicing
    • Basic KPIs:
      1. Percentage of invoices requiring manual intervention, by invoice type (e.g., paper, paper with PO, electronic PO)
      2. Average DSO, by invoice type
    • More advanced KPI:
      1. Processing time, by invoice type

 

In the Next Blog We'll Cover Step 4: Assess Potential Benefits

If you don't want to wait until tomorrow to learn more, then go to the Supply Lines group to read the full article.