How e-Procurement Technology Can Transform Business Functions
Procurement has undergone significant changes recently, progressing from a strategic function to a more digitized and tactical process. In the old procurement process, the function was handled manually, depending on spreadsheets, lots of paperwork, phone calls, and in-person meetings/conversations.Thank you for reading this post, don't forget to subscribe!
Traditional procurement methods crippled an organization’s operations and potential for financial success by depending on cumbersome and time-consuming repetitive tasks that failed to create major profit/savings.
In this digitized environment, the manual approach doesn’t seem to have a place any longer. Hence, transforming procurement operations to a digital and unified platform accelerates and streamlines all source-to-pay operations, thus generating opportunities to create more savings and value in the procurement process.
Here we present the top advantages of moving the traditional procurement method to an e-procurement platform.
Granular Insight into Expenses
In the traditional approach, it was quite challenging to track and handle spend patterns and behavior. Without a streamlined and clear view of operations as well as transactions, organizations failed to realize significant savings. With an automated procurement solution, the overall transparency and visibility of source-to-pay methods are increased, providing procurement leaders complete visibility into spend behavior.
Cloud-based procurement technology provides easy access to more data at a time, and via advanced analytics, the data is later extracted and cleansed, thus boosting spend transparency and enabling enhanced spend analysis. Plus, organizations can also monitor spend behavior in real-time, aiding to better manage, and track their spending as well as savings and minimizing maverick spending.
Enhancement in Operational Effectiveness
Today, many procurement leaders can receive so much more by simply moving from the manual procurement approach to an electronic one by leveraging an e-procurement system. In a manual approach, procurement operations were handled through heavy paperwork and spreadsheets. In transforming operations to a robust procurement platform, source-to-pay methods become automated, and operations are sped up with quicker processing, thus enabling procurement professionals to save valuable time.
An automated procurement software streamlines every functionality of the procurement method and helps it communicate with other functionalities. This feature generates more effectiveness within the process, allowing procurement leaders to do in a few days what previously used to take weeks.
Process optimization creates long-term and instant savings via initial and continuous enhancements in efficiency. Your team members can prevent spending time and resources on less-value tasks and shift their focus on more strategic ones. You can realize even more cost savings via minimized need for headcount, overhead, or investment in software and hardware and also in office supplies.
SutiProcure includes all the features that your business requires, without unnecessary bloat- while also leaving room for non-disruptive scalability and expansion down the line.
Easy to Implement
An organization doesn’t want to spend weeks configuring new software for their staff to use. Fortunately, it’s not the case with e-procurement systems. While ERP solutions can take months to set up even with the help of consultants, procurement solutions are more intuitive when it comes to implementation.
Organizations typically follow a specific processes that they need to establish when it comes to purchasing. Procurement software solutions offer various modules in order to carry out those workflows effectively. Things like strategic sourcing, P2P, and contract management are all offered via e-procurement, and solutions can often be configured to generate a process that centralizes the management of these separate requirements.
Still anxious to know whether a procurement system can cover all your business needs? Try finding out if those requirements align with the commonly used solutions throughout purchasing teams; chances are there, that your use case will be on the list.
The other bonus about e-procurement is that it’s easy to connect to the support team. Free demos on the solution, live chat for assistance, and tutorial resources are offered to help teams via the implementation and onboarding process.
Preventing Supplier Lock-in Situations
Nobody wants to get stuck using tools that they don’t like, especially when there are better options available in the market. One of the good things about electronic procurement is that it’s simple to switch between suppliers if you find a solution that is better than the one you are presently using. Plus, you can export transaction records and purchasing data to spreadsheet format easily. If you find a more appealing procurement solution in the long run, shifting your data is easy for importing it from a saved Excel sheet.
Also, consider multi-sourcing your procurement software depending on the requirements of your organization. It’s because of the affordable nature of electronic procurement, purchasing into various systems that excel at offering certain tools is a viable approach for meeting the needs of your procurement department.
Increases External Compliance with Vendors
Today, businesses are moving online on all fronts. According to the PayStream Advisors Payables Insight Report of 2018, organizations reported that above 35% of invoices are being received online. In earlier reports, it has been observed that over 75% of POs are sent through email as well. As vendors continue to embrace digital tools into their order receiving method, they are also going to find it more convenient to respond to orders which are sent via online tools.
By managing your purchase process via digital procurement, you are complying with the way most companies are starting to operate and can expect to have a good compliance rate from vendors. Using standardized PO and RFQ templates helps you to look more professional. Plus, you are going to make your vendors happy with a simple way to process the order.
Gives Control, Improves Collaboration, and Eliminates Confusion
How often do you hear the question during the purchasing process- who should this requisition go to for approval? Has the vendor responded to this PO yet? What is the present stock level for this item? And the list continues. During sourcing events, external as well as internal collaboration can also get involved. What is the best offer presently, or what is the cost of ownership- again there are lots of communication taking place that can get difficult to handle via phone calls and emails.
E-procurement systems enhance collaboration by centralizing all of the communications that take place in the purchasing workflow. What is even greater is that the communication can be saved along with other information on a completed transaction. This means that audit reports of what happened during the sourcing event become easy to share with stakeholders. Other actions taken by staff such as attached documents, notes, and granted approvals, are saved on every step of documented methods.
Best Practices Are Always Embedded in Procurement Solutions
Have you ever wondered if your enterprise is keeping up with the best practices in procurement? Almost every SOP can be maintained and set up via an e-procurement platform. Some of the methods include:
- Routing approvals to the right individuals automatically before orders are sent.
- Verifying vendor performance based on efficiency, timing, and quality of goods.
- Making sure orders are placed from established contracts in order to prevent off-contract spending.
- Assessing delivery details and invoices in order to confirm a 3-way matching on every purchase.
Procurement software makes it easy for your organization to embed these practices into your purchasing method without the need to micromanage your staff.
Integrates with Other Existing Applications
It is difficult to find a procurement solution that doesn’t integrate with a handful of accounting systems-as streamlining AP with purchasing teams has become a desirable optimization in several organizations.
Many businesses decide on an e-procurement solution to utilize based on the integrations they offer. While there are other features and criteria to consider, looking for a system that gets a thumbs up from the accounting department will make things easier when the time comes for implementation.
Plus, it’s crucial not to skip the other major advantages of an online procurement software by getting too focused on an accounting perspective. Several platforms provide custom integration work, so that the possibility to expand on what every team requires will be an option when you move forward.
Shortened Business Cycle
Transactions are quickly completed using e-procurement solution, as automated methods and a reduction in physical paper transfers enhance the capacity of completing transactions in real-time. This effectiveness can have a ripple impact throughout the company and increase speed, as other teams are no longer needing to wait for manual data entry and approval methods.
Are you tired of searching for a new space in order to store all the paperwork? No worries! With e-procurement software, you can save and store everything in an electronic format. It not only saves you from needing more room, but also makes the process of finding older tenders easily.
To Sum Up
Beyond an easy transition to an e-procurement software, a massive potential exists on the digital transformation journey. While deploying cutting-edge and growing technologies, such as AI and big data, organizations are starting to grasp the depth of smart procurement. When organizations are going digital completely, procurement functions are finding their home on procurement platforms. The AI-powered, unified, and cloud-based platform streamlines the source-to-pay process, rethinking how procurement leaders work and extending procurement possibilities.