PO Management Savings

Evidence and data. Interviewees detailed how adopting SPS Commerce streamlined and automated purchase order management processes while enhancing visibility across the order lifecycle. The interviewees’ organizations automated manual, error-prone activities, such as PO creation, tracking, vendor communication, and exception management, utilizing EDI workflows and analytic dashboards to manage and remediate fulfillment issues. These improvements enabled teams to proactively manage exceptions, reduce manual follow-up, and improve order accuracy. As a result, several interviewees said their organizations reallocated staff or avoided hiring additional resources as they grew.

• The senior manager of supplier operations at an industrial distributor described how SPS Commerce helped establish expectations with vendors for order acknowledgement, advanced shipping notices, and invoices. By automating the exchange of these documents through SPS Commerce, their purchasing and customer care teams gained greater visibility into order status and could more easily identify and proactively remediate order fulfillment issues. This interviewee shared that vendor compliance for purchase order acknowledgement and advance shipping notices improved to over 80%, a significant increase compared to before engaging with SPS Commerce. The senior manager quantified the cost of manual follow-up when key documentation was missing, estimating $6 per transaction. By improving document compliance, their organization avoided nearly $1 million in annual operational costs.

• The chief supply chain officer at an appliance retailer reported that, prior to SPS Commerce, buying teams frequently had to resolve purchase order issues caused by manual data-entry errors. Automating the exchange of purchase order information with vendors through SPS Commerce enabled accurate and consistent dataflows between systems, eliminating manual entry errors and reducing the need for time-consuming corrections. This interviewee estimated that their organization reduced the rate of errors requiring remediation from 30% to just 2%, freeing up time for buying teams.

• The senior manager of supply chain operations and the merchandise manager at a resort company shared that SPS Commerce enabled their retail product team to shift from manual purchase order follow-up to proactive exception management. Previously, a team of more than 10 employees manually entered and updated PO data, including revisions and confirmations received from vendors through emails and PDFs. By automating processes, their organization reduced the size of this team by half and improved order accuracy by approximately 10% through automated order validation. These interviewees said order exception management capabilities improved productivity by an estimated 20%, enabling buyers to more easily identify and manage discrepancies such as missing costs or unconfirmed items. They emphasized that automated alerts and exception-based workflows reduced the need for the line-by-line reconciliation of orders.

• The EDI manager at a food distributor highlighted how SPS Commerce enabled buyers to shift from manual validation of purchase orders to exception-based management. Previously, their buyers manually confirmed and reconciled quantities and pricing for every order. With SPS Commerce, automated alerts flagged order issues or exceptions, allowing buyers to focus on proactively resolving identified issues rather than reviewing each purchase order individually.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The composite organization has 20 purchasing managers responsible for creating and managing purchase orders.

• Each purchasing manager experiences a 40% productivity improvement due to SPS Commerce.

• The average fully burdened annual salary for a purchasing manager is $100,000.

• Eighty percent of the productivity savings are recaptured productively.

Risks. Forrester recognizes that these results may not be representative of all experiences and the value of the benefit will vary depending on:

• The number of resources dedicated to managing purchase orders at an organization.

• The maturity of an organization’s prior purchase order management processes.

• The degree to which vendors comply with EDI requirements.

• The likelihood that time savings are recaptured productively.

• Variation in salaries.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.4 million.

Streamlined Order Receiving

Evidence and data. Interviewees shared that SPS Commerce helped streamline receiving processes across distribution centers and store locations by automating the exchange of purchase order and advanced shipping notice data and enabling barcode-based scanning. Prior to SPS Commerce, their receiving teams relied on manual item counts, which delayed intake and required significant labor. By establishing scan-and-go receiving processes, the interviewees’ organizations accelerated receiving workflows, reduced manual effort, and improved inventory accuracy. These improvements enabled faster inventory intake, eliminated backlog inventory areas, and reduced staffing needs.

• The senior manager of supplier operations at an industrial distributor shared that SPS Commerce supported the implementation of a barcode-based scan-and-go system within distribution centers, significantly improving shipment receiving speed. Prior to SPS Commerce, their staff manually opened boxes and counted items to validate correct items and quantities, a time-consuming process that delayed intake. By leveraging standardized data from EDI transactions, including advanced shipping notices, the interviewee’s organization was able to link barcodes to shipment contents and streamline receiving workflows. The interviewee shared that the system reduced manual labor and helped goods move through receiving into inventory more efficiently.

• The EDI product manager at a grocer shared that SPS Commerce helped streamline store-level receiving processes. By leveraging automated purchase order and advanced shipping notice data, their store staff used handheld devices to scan items and match them to the correct purchase orders using PO numbers, tracking details, and shipping identifiers. This process reduced manual counting and validation and enabled faster intake of goods.

• The senior manager of supply chain operations and the merchandise manager at a resorts company shared that SPS Commerce significantly improved receiving efficiency across their organization’s distribution centers. Prior to SPS Commerce, their warehouse staff manually opened boxes and counted items, with average receiving times of 2.5 hours per shipment. Automated dataflows and improved vendor accuracy reduced discrepancies between purchase orders — including items and quantities — and the goods received, minimizing documentation and remediation work for distribution center staff. As a result, receiving time dropped to 10 minutes per order. The interviewee said their organization also eliminated a dedicated backlog area previously used to stage partial shipments, reduced average cartons sitting on shelves by 67%, and decreased its distribution center staff by 12.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The composite organization receives 50,000 shipments from vendors annually.

• The time to receive and process a shipment before SPS Commerce was 1.5 hours.

• With SPS Commerce, the composite organization implements a scan-and-go receiving process utilizing handheld barcode scanners. The new receiving process reduces the time to process a shipment to 0.25 hours.

• Forrester attributes 50% of the time savings to SPS Commerce versus the impact of the scanner technology.

• The fully burdened hourly rate for a resource involved in receiving is $18.

Risks. Forrester recognizes that these results may not be representative of all experiences and the value of the benefit will vary depending on:

• The number of shipments an organization receives annually. One purchase order may translate to multiple shipments. For simplicity, Forrester conservatively modeled the number of purchase orders and shipments as one to one.

• The maturity of an organization’s shipment receiving processes before SPS Commerce.

• The degree to which vendors comply with EDI requirements.

• The burdened cost of staff involved in receiving.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.2 million.

Accounts Payable Productivity Savings

Evidence and data. Interviewees shared that SPS Commerce improved accounts payable (AP) efficiency by increasing invoice accuracy and reducing remediation effort. By automating data exchange with vendors, the interviewees’ organizations improved alignment between purchase orders, goods receipts, and vendor invoices, reducing the need for manual reconciliation by accounts payable teams. Interviewees noted that SPS Commerce created a source of truth across the order-to-invoice lifecycle, enabling staff to more easily investigate and resolve discrepancies. As a result, the interviewees’ organizations controlled growth in accounts payable costs or avoided hiring additional resources as invoice volumes increased.

• The chief supply chain officer at an appliance retailer shared that SPS Commerce enabled their organization to scale its accounts payable operations without increasing staff despite a significant rise in drop-ship purchase orders. Prior to automating purchase order and invoice dataflows with SPS Commerce, their accounts payable staff manually keyed in invoices sent from vendors and matched them to purchase orders — a process the interviewee described as “labor-intensive” and “error-prone.” With SPS Commerce, this interviewee’s organization automated the exchange of order information, reducing error rates to just 2% and significantly reducing exception handling due to mismatches between purchase orders and invoices. The chief supply chain officer noted that only two employees are required to support accounts payable effort.

• The senior manager of supplier operations at an industrial distributor shared that SPS Commerce improved invoice accuracy and reduced reconciliation issues by increasing EDI adoption among vendors. Vendors onboarded to EDI achieved approximately 20% higher three-way match rates across the purchase order, goods receipt, and invoice compared to those still submitting invoices manually, resulting in more timely payments and fewer exceptions for the interviewee’s accounts payable team. This interviewee also reported a 20% year-over-year reduction in error exceptions for their organization. In addition to process improvements, SPS Commerce helped reduce hard costs associated with manual invoice processing, including third-party service fees of an estimated $2 per invoice. By automating invoice exchange and increasing full-cycle compliance, the interviewee’s organization significantly reduced the volume of manual processing and associated costs.

• The senior manager of supplier operations and the merchandise manager at a resorts company shared that SPS Commerce improved visibility and created significant efficiencies for their organization’s accounts payable teams. Before automating dataflows across the purchase order-to-invoice lifecycle, accounts payable staff manually created cost recovery invoices and reconciled discrepancies with vendors. By leveraging purchase order acknowledgements and advanced visibility into pricing and discount discrepancies, they said their organization improved invoice match rates by approximately 10%. Faster invoice processing additionally supported more up-to-date financial reporting and allowed their organization to take advantage of term discounts.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The composite organization receives 50,000 invoices annually.

• Before SPS Commerce, 25% of invoices required reconciliation by the accounts payable team. The effort to reconcile an invoice was 1.5 hours.

• With SPS Commerce, the composite organization experiences a 30% reduction in invoices requiring reconciliation.

• The average fully burdened annual salary for an accounts payable resource is $81,000.

• Eighty percent of time savings are recaptured productively.

Risks. Forrester recognizes that these results may not be representative of all experiences and the value of the benefit will vary depending on:

• The maturity of an organization’s purchase order-to-invoice processes before SPS Commerce.

• The number of invoices an organization receives. One purchase order may translate to multiple invoices. For simplicity, Forrester conservatively modeled the number of purchase orders and invoices as one to one.

• The effort required to reconcile an invoice.

• Variation in accounts payable salaries and costs.

• The degree to which time savings are recaptured productively. Organizations that outsource accounts payable labor may realize higher productivity recapture.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $392,000.

Stock-Out Mitigation

Evidence and data. Interviewees shared that SPS Commerce helped their organizations prevent out-of-stock incidents by improving inventory visibility and supplier coordination. Prior to SPS Commerce, limited visibility into vendor inventory levels and order fulfillment issues led to stock-outs, missed sales opportunities, and customer dissatisfaction. By automating and standardizing data exchange during the order lifecycle, the interviewees’ organizations gained earlier insight into inventory gaps and disruptions.

• The EDI product manager at a grocer noted that SPS Commerce enhanced their organization’s ability to mitigate out-of-stock incidents by improving order visibility, enabling proactive vendor substitution, and enhancing inventory tracking. Prior to SPS Commerce, stores had limited visibility into short shipments and vendor disruptions, which often led to stock-outs. By leveraging purchase orders, order confirmations, and advance ship notices, SPS Commerce enabled the interviewee’s organization to identify inventory gaps earlier and take corrective action to mitigate revenue leakage. Additionally, the interviewee also shared that having SPS Commerce streamlined the process of onboarding new vendors, enabling the grocer to quickly bring on a replacement supplier when a major vendor became unavailable and avoiding a significant supply chain disruption. These capabilities improved their organization’s ability to maintain on-shelf availability for customers.

• The senior manager of supply chain operations at a resorts company shared that SPS Commerce helped reduce warehouse backlogs, enabling goods to reach retail locations faster. Prior to SPS Commerce, their shipments were frequently held in warehouses due to order issues requiring manual investigation and remediation. By improving order fulfillment accuracy and data sharing with vendors, their organization significantly reduced the volume of inventory held in backlog.

• The senior manager of supplier operations at an industrial distributor shared that SPS Commerce improved visibility into supplier fulfillment performance, helping their organization improve demand planning. By improving data exchange across the order lifecycle and utilizing vendor scorecards, the organization gained clearer insight into lead times, order status, and overall vendor performance. The interviewee said these capabilities enabled more constructive conversations with vendors to identify fulfillment issues and helped their organization fine-tune ordering patterns and demand planning. As a result, the industrial distributor increased its annual OTIF performance across vendors to nearly 85%.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• The composite organization generated $3.5 billion in annual revenue before SPS Commerce.

• Prior to SPS Commerce, stock-outs resulted in a revenue loss equivalent to 5% of the organization’s annual revenue.

• With SPS Commerce, the composite organization reduces stock-outs by 1% in Year 1, 3% in Year 2, and 5% in Year 3.

• The composite organization has a profit margin of 7%.

Risks. Forrester recognizes that these results may not be representative of all experiences and the value of the benefit will vary depending on:

• The prevalence of stock-outs in an organization’s prior environment and impact on revenue.

• The degree to which vendors comply with EDI requirements.

• An organization’s profit margin.

• The maturity of an organization’s inventory planning and replenishment processes.

• An organization’s ability to mitigate stock-outs and supply chain disruptions.

Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $700,000.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Improved vendor relationships and performance. Interviewees shared that adopting SPS Commerce improved vendor performance and relationships by providing insights and scorecards on vendor performance, enabling them to identify performance gaps and have data-driven discussions with their vendors. For example, the senior manager of supplier operations at an industrial distributor said: “The vendor scorecards have helped us start measuring our suppliers on how they’re performing operationally. That has created great relationship building conversations with our suppliers and allowed us to bring the data to them that we were seeing so we can work through the operational challenges and quantify some of the problems that previously we could only talk about anecdotally.”

• Vendor onboarding support. Interviewees noted that SPS Commerce acted as an extension of their internal teams to manage vendor onboarding, taking ownership of outreach, testing, and certification to reduce effort for supply chain teams and accelerate onboarding timelines. SPS typically engaged suppliers in a one-to-one capacity, handling multiple touches with each. It also facilitated communication strategies, provided engagement tools, and managed escalations to minimize lift for supply chain teams and ensure suppliers were ready to do business with the interviewees’ organizations. For example, the senior manager of supplier operations at an industrial distributor shared that SPS Commerce managed technical testing and validation with vendors, reducing onboarding timelines for most suppliers down to six to eight weeks. Similarly, the EDI manager at a food distributor relied on the SPS Commerce team for project management, supplier engagement, and compliance checks. This interviewee said SPS Commerce tailored outreach to their vendors and managed technical setup, streamlining the onboarding experience. The supplier enablement leader at a grocer similarly reported that SPS handled vendor communications and triaged vendor questions and issues, significantly reducing typical onboarding timelines. They highlighted how SPS Commerce’s vendor management dashboard was a valuable tool for tracking onboarding progress and maintaining visibility throughout the process.

• Better customer experience. Two interviewees shared that adopting SPS Commerce provided the visibility needed to deliver a better customer experience during drop-shipping fulfillment. The senior manager of supplier relations at an industrial distributor said having SPS Commerce eliminated the “black hole” between order placement and delivery for customers by enabling real-time supplier updates and tracking information and allowing customers to receive timely order status updates. The chief supply chain officer at an appliance retailer noted that SPS Commerce ensured accurate inventory levels and reduced late shipments from drop-shipping vendors, ensuring product availability and on-time fulfillment for customers. Beyond drop-shipping, the EDI product manager at a grocer said that SPS Commerce also helped improve on-shelf item availability for customers.

• Regulatory compliance. The EDI manager at a food distributor and the EDI product manager at a grocer both described how SPS Commerce helped position their organizations to comply with industry regulatory requirements, particularly the Food Safety Modernization Act (FSMA).³ By updating EDI requirements to include FSMA-required data fields like country of origin, SPS Commerce enabled these interviewees’ organizations to capture critical product-level information that would be required to be reported to regulators in the future. Interviewees shared that the SPS Commerce team provided expert guidance on the compliance requirements, advised on necessary EDI updates, and supported communications with their organizations’ vendor ecosystems to implement the changes. As a result, both interviewees were confident that their organizations were prepared for future FSMA enforcement.

• SPS Commerce partnership. Interviewees highlighted that SPS Commerce served as a strategic partner throughout their supply chain automation journeys. They said that the team provided industry-specific expertise, consultative guidance, and best practices that helped their organizations optimize processes and adopt proven industry standards. The senior manager of supply chain operations and the merchandise manager at a resort company described SPS Commerce’s resources as an extension of their internal team, offering targeted recommendations to address inefficiencies and sharing insights into what similar companies were doing. Similarly, the senior manager of supplier operations at an industrial distributor said, “We have quarterly business reviews with them three or four times a year where we talk about how things are going and ideas for the future. What’s been most interesting is seeing how SPS has evolved into a full supply chain management partner. They’ve been a partner in growth with us, where we’re able to have a back-and-forth dialogue on what we’re seeing.”

• Drop-shipping. Two interviewees said SPS Commerce helped support their organizations’ drop-shipping businesses by enabling data sharing with their vendors. Forrester’s research finds that more brands and retailers are leveraging drop-shipping models, extending their organization’s reach and product portfolio without capital investment; however, shifting to this type of model requires product, inventory, and consumer data sharing to enable joint decision-making and planning.⁴ The chief supply chain officer at an appliance retailer said having SPS Commerce helped their organization automate the exchange of inventory and order data with its drop-shipping vendors. This reduced freight distance by allowing vendors to fulfill orders from locations closer to the customer, lowering parcel shipping costs by an estimated 25%. The drop-shipping model also reduced inventory holding needs at the interviewee’s organization’s own warehouses, contributing to faster inventory turnover and lower carrying costs.

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement SPS Commerce and later realize additional uses and business opportunities, including:

• AI and predictive analytics. Forrester’s research finds that organizations are increasingly exploring AI and predictive analytics to improve supply chain resilience, planning, and decision-making.⁵ Interviewees saw opportunities to utilize the data enabled by SPS Commerce for predictive analytics and AI use cases. The senior manager of supplier operations at an industrial distributor said: “I think it gives us the ability to potentially do more forecasting and predictive analytics in the future. If we have historical data to see trends and how different parts of the order processing chain are moving with different situations, whether economically or in the industry, that gives us a strong foundation to forecast or predict. For example, if we make a change or if something shifts in the market, we can better understand how that might affect how we need to prepare. I think that’s the biggest thing that doing business with SPS Commerce may give us in the future with what we’re working on.” The chief supply chain officer at an appliance retailer noted that they saw an opportunity to feed data from SPS Commerce into its AI-enabled product information management tool.

• Improved vendor accountability through cost recoveries. The senior manager of supply chain operations at a resort company said that the capabilities provided by SPS Commerce would support their plans to improve vendor accountability through a cost recovery model in the future. They shared: “As a company, we did not have good visibility into fill rate before. We are currently producing vendor scorecards and having buyers use them in vendor conversations to educate suppliers. In the future, we plan to move into a chargeback model to hold vendors accountable. SPS’s Performance Management tools are going to help us get there.”

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Impact Approach).