E-Procurement Software - Benefits and Best Practices You Need to Know

Introduction

Globally, business owners want to get a good value for money when they purchase anything from suppliers. Whether they want to get a competitive edge over peers or fulfil the customer’s requirements effectively, this approach is useful. Here, procurement comes into the picture. This post talks about the importance and benefits of E-procurement software.

Let’s start with the importance of procurement solution in modern businesses.

Importance of Procurement in Modern Businesses

The procurement process involves aspects including the identification of the need for a product or service and negotiation of terms and conditions. Simply put, it includes all activities ranging from need identification to finalize contracts to fulfil the requirement. We can classify the procurement process into four types- direct, indirect, goods, and services.

Procurement plays a vital role in businesses. It ensures the company’s expenditure on goods or services in line with its medium to long-term objectives. It is also useful for controlling expenditure and minimizing financial risks. Procurement solution also impacts the company’s financial performance by ensuring the best value for their money.

As technology evolves, the process gets a digital boost in the form of E-procurement software. Let’s dig deep into it.

Overview of E-Procurements and Its Scope

E-Procurement is an online process to sale goods or services between businesses, consumers and businesses, and governments and businesses using the Internet. Procurement is imperative for companies to expand operations and increase revenue. E-procurement drives transformation of this process to streamline workflows and bring automation.

E-Procurement or electronic procurement can streamline various activities including streamlining purchase requests, generating purchase orders, sending requests for approval, and managing suppliers. A reputed procurement solution provider offers an advanced E-Procurement solution for bringing automation and increasing accuracy in the process.

Key Components of E-Procurement

An E-Procurement solution consists of electronic catalogs, supplier and accounting management modules, purchase order systems, inventory control systems, contract negotiation and management platforms, and payment processing tools. Business intelligence software and product monitoring systems are also a part of this robust solution.

Key industry sectors like education, healthcare, NGOs, supply chains, and governments use E-Procurement software to simplify complexities and perform the online process seamlessly. Let’s dig deep into the E-Procurement process.

Step-by-Step Process of E-Procurement

The E-Procurement process is similar to traditional procurement cycle, but this process is digital and involves stages including-

• 1. E-Informing

  It is the first step of a procurement cycle and involves a two-way exchange of information between internal and external parties of the organization. It enables the company to optimize E-Procurement processes.

• 2. E-Sourcing

  It includes specific requirements and sourcing. Companies can shortlist pre-qualifying, potential suppliers based on procurement requirements. This stage leads to E-tendering.

• 3. E-Tendering

  This is a crucial step that involves both solicitation and evaluation. It consists of requesting information, quotations, and proposals from the shortlisted suppliers. Companies can analyze and assess this data.

• 4. E-Auctioning or Reverse Auctioning

  This is another major step that is associated with evaluation and awarding contracts. Here, the involved parties negotiate pricing and contract terms. Once they reach an agreement, the company buys goods or services. In e-auctioning, many buyers compete to contract with one supplier, whereas in e-reverse auctioning, many suppliers compete to contract with one buyer.

• 5. Order Placement

  It is also known as E-ordering and involves two phases- negotiating and contract management. Order is placed after creating, approving, and executing requisitions.

• 6. Goods Receipt and Payment

  It is a final step that involves generating receipts for goods or services and making payments.

An advanced E-Procurement solution can assist companies to manage all these processes effectively. Let’s dig deep into the top benefits of this process.

Top Benefits of E-Procurement

An E-Procurement software is useful for many companies irrespective of their sizes, sectors, and business models. This software can simplify complexities and improve the overall process while offering the following benefits-

• - Create access to the company’s role-based, shared data

• - Make workflows touchless for all major activities

• - Integrate catalogs with contract management for ensuring the selection of the best supplier every time

• - Integrate procurement with the existing software for gaining more efficiency and productivity

• - Keep everyone on the same page with centralized and cloud-based data management

• - Eliminate bottlenecks, obstacles, and the chances of human errors by bringing automation

• - Get critical data analytics tools to get actionable insights and make meaningful decisions

• - Optimize processes to save costs and time in the procurement process

An E-Procurement software company can assist companies to leverage these benefits with a customized solution. However, it is necessary to follow best practices for implementing this software successfully.

Best Practices for Successful E-Procurement Implementation

All the procedures including supplier selection, contract discussions, and items purchase are part of a vast E-Procurement strategy. Here are the best implementation practices that a reputed procurement solution provider should follow-

• Step 1. Establish E-Procurement Strategy

  It starts with establishing a standardized process and strategy across your organization. You need to define the objectives and ensure that all the procurement activities remain consistent with them. Moreover, it is essential to include all the stakeholders and employees when making a blueprint of E-Procurement strategy.

• Step 2. Identify E-Procurement Requirements

  This is a crucial step for ensuring the success of E-Procurement implementation. When you define the requirements clearly along with challenges, you can get the solution to address them effectively. It further contributes in optimizing process and selecting the right supplier.

• Step 3. Find Weaknesses in Purchasing

  After defining E-Procurement requirements properly, it is imperative to focus on the problems that are evident in real procurement process. It will help you understand the main reason behind such issues and resolving them effectively.

• Step 4. Make a Proper Plan

  Before selecting the most suitable E-Procurement software, it is better to make a blueprint consisting of its advantage and cost. Once the management passes this plan, you can plan every phase and set up KPIs properly. You need to consider human and financial resources.

• Step 5. Choose the Right Solution

  You need to select the right procurement solution that matches with budget and company requirements. However, value the solution can generate is also an essential factor. High-quality solution with cutting-edge features can be beneficial for your company.

• Step 6. Implement from a Reliable Partner

  After completing all the stages successfully, you should pay attention to the implementation procedure. Here, it is fair to mention that companies need to avoid additional pressure on their employees while implementing E-Procurement plan.

All these steps will help companies get the benefits of advanced solution for a long time.

Concluding Remarks

A customized E-Procurement software is useful for eliminating obstacles and chances of human errors in the purchasing and related processes. Companies can optimize process and save time with the help of an E-Procurement solution. However, it is necessary to follow standard procedures to gain the benefits of an E-Procurement solution.

Procure Suite is a feature-rich and robust procurement solution. It has all the necessary features including, Reverse Auction, Purchase Requisition, Spend Analysis, and Supplier Management. We offer the top-notch support on a 24x7 basis to help your company save big on procurement. Contact us to schedule a demo or visit our website to learn more.