Getting the most out of your purchasing with e-procurement

Electronic procurement (or e-procurement) systems are software-as-a-service (SaaS) systems implemented as part of a digital initiative. These provide a cloud-connected environment that brings together the various elements of your purchasing or supply chain. This allows businesses to create systems with the optimal levels of connectivity between all the various links in the chain for improved efficiency and visibility.

E-procurement is seen as an effective way to better control the supply chain and drive efficiency. E-procurement systems have their pros and cons and assessing these allows better decisions on whether they would be appropriate for your business.

Cost savings.

By automating and optimising process-based and low-level tasks within an e-procurement system, staff can shift their focus to high-value work with greater impact. Organisations are then better able to make further savings on overheads.

Cost-effectiveness

Businesses have to tackle complex checks and analysis to reduce operational costs. This can be time-consuming and prone to human errors, particularly with manual three-way matching. E-procurement solutions automate this. Over the lifespan of using an e-procurement system it can result in considerable improvements in cost-effectiveness, such as preventing duplicate payments, reducing invoice delays, managing expenses by leveraging volume buying, as well as saving the costs associated with paper-based systems.

Better visibility

One of the clearest benefits of e-procurement systems is centralised data, which significantly improves supply chain visibility. Any authorised team members can access data and records to monitor procure-to-pay activity and look for opportunities to drive better efficiencies.

Transparent spending

Unplanned spending occurs more frequently than is often realised. This might happen because the procurement department has to purchase items either without approval or deviate from the purchase order at some point. These ad hoc, unplanned purchases can get lost when trying to track through paper-based, more traditional means. An electronic audit trail allows for greater transparency and access to the decision making and approval for purchasing.

Improved communication and organisation

Centralised, cloud-based data management means everyone’s on the same page, no matter where their location or the device they are using. Automation and integration removes bottlenecks and human error, improving overall efficiency while reducing costs and waste. Comprehensive data storage also makes it easier to access important data to analyse for actionable insights and forecasts built on complete, reliable information.

Cost to set up

Initial outlay for an e-procurement system can be large. This can be particularly prohibitive for small and medium sized companies.

Costs can be mitigated by using supplier e-procurement systems which offer many of the benefits such as cost savings on purchases, transparency, access to permitted staff, agreed pricing levels and direct integration with your business systems.

Culture shock

It is almost inevitable with each new technology or change introduced comes culture shock and perceived limitations of the system.

Integration and technical challenges

Issues can arise around integrating new systems with current ones. It may also be that users require training to fully understand how to use the software.