Could your company use a healthy dollop of extra time, money, and productivity? Your procurement department has powerful potential as a source of more than savings. Through continuous improvement, strategic sourcing, and smart spend management, you can make procurement a strong and consistent value center that supports your company’s success and growth.
However, if you’re not already using an electronic procurement, or eProcurement, solution to manage your procurement function, you could be losing money and work hours to process inefficiencies, insufficient process controls, and unoptimized spend. Fortunately, it’s easier than you may think to identify and implement an eProcurement software system that will help you streamline your procurement process for optimal return on investment (ROI) and value.
Why Your Company Needs an eProcurement Solution
The age of pen-and-paper-based procurement has ended. And while many companies—particularly those with a corporate culture somewhat married to the past—continue to struggle with or even actively resist digital disruption, the future of procurement lies in “The Three As”: automation, artificial intelligence (AI), and analytics.
A 2018 study by research firm The Hackett Group predicts procurement organizations will have a total adoption rate of 88% for cloud-based, automated eProcurement software by 2021, with similar estimates for data visualization tools (81%), comprehensive data management utilities (84%) and advanced analytics (84%). Failing to embrace eProcurement in such a market isn’t just inefficient, but potentially deadly to the competitive advantage and overall success of a business.
Choosing an eProcurement solution like PurchaseControl makes it easy to overcome the challenges of traditional procurement with manual processes, including:
- Resource waste and extra expense from paper use, storage, and disposal.
- Inefficient, manual data entry and verification (e.g., three-way matching).
- A lack of both real-time and long-term spend visibility, damaging cash flow and negatively affecting the accuracy of financial reporting, forecasting, and audits.
- Serious vulnerabilities to maverick spend, theft, and invoice fraud.
- Inefficient and incomplete data collection, management, and analysis.
- Supply chain bloat and a lack of strategic supplier management due to incomplete information on vendor performance and compliance.
- Redundant purchases at varying price points through numerous channels, creating extra inventory and wasting time, money, and resources.
- Damaged supplier relationships due to late payments and mistakes created by human errors, process inefficiencies, and delays in approval workflows.
- Suboptimal contract negotiations due to incomplete spend data and strained supplier relationships.
- Extra work for both accounts payable and procurement due to lack of shared data access, incomplete transactional data, and manual research and cross-referencing workflows.
By choosing to implement a cloud-based eProcurement platform, your business can move past the problems of old-school purchasing processes and shift toward a continuous improvement model that affects not just procurement, but all your business processes.
“The age of pen-and-paper-based procurement has ended. And while many companies—particularly those with a corporate culture somewhat married to the past—continue to struggle with or even actively resist digital disruption, the future of procurement lies in “The Three As”: automation, artificial intelligence (AI), and analytics.”
Key Benefits of eProcurement Software
The frustrations that accompany manual procurement—both everyday and exceptional—can all be addressed with the help of a comprehensive eProcurement system. Equipped with ” the three As”, a complete eProcurement tool like PurchaseControl is flexible, customizable, and user-friendly. Automation, AI, and superior data analysis help you gain total control over your procurement and your general business processes, including:
- The Procure-to-Pay (P2P) Process
- Supply Chain Management
- Supplier Relationship Management
- Strategic Spend Analysis
- Inventory Management
- Contract Management
- Improved Financial Reporting, Forecasting, and Auditing
- Training and corporate culture initiatives to ensure 100% buy-in and compliance with eProcurement processes and tools.
- Integration with existing enterprise resource planning (ERP) and accounting software.
The application of “The Three As” builds three types of value for your business: Strategic, Organizational, and Savings.
One of the most powerfully transformative aspects of eProcurement management software lies in the sharper insights and improved decision-making that accompany process automation.
- eProcurement systems auto-populate documents such as purchase requisitions, and purchase orders with correct information from the central server. Process optimization ensures both regular purchases and those that require new vendors or items feed accurate, trackable, and complete data back into the system for further analysis and insights.
- Requests for quotes (RFQs), requests for proposal (RFPs), and requests for information (RFIs) can be integrated with supply chain management and supplier relationship management to facilitate onboarding of new suppliers.
- Total spend visibility provides accurate financial data, ensuring cash flow, financial reporting, and audit trails are all correct and complete. Actionable insights are easier to obtain, and built-in collaboration tools make it easy for different business units to connect and strategize.
- Stronger supplier relationships through improved collaboration and integration via vendor portal access. Support for electronic invoicing (eInvoicing) simplifies purchase order and invoice cycles while providing additional spend and vendor performance data that can be used to identify top performing suppliers, rehabilitate or replace struggling ones, and strengthen your negotiation position during contract management.
- Supply chain disruption is minimized with automated workflows that specify primary and contingency suppliers for essential goods and services.
- The procurement team can use data insights to provide valuable strategic advice and information to the rest of your organization, improving competitive advantage.
Procurement automation drives process improvements by taking humans out of low-value processes while keeping them in the loop. Centralized data collection and management, available from desktop and mobile devices with secured, level access, means everyone’s always on the same page, from procurement to accounting to marketing and sales.
- Complete buy-in ensures everyone has the same high-quality user experience while complying with purchasing policy. Training, refreshers, and ongoing support ensure no one is left to struggle with questions.
- Leveled, account-based access means everyone on your team has access only to the goods and information they need to perform their roles, but can still connect with others to collaborate on decision making, reporting, etc.
- Automated workflows free staff from low-value, tedious chores like data entry and allow them to focus their skills on more important tasks. Reduced need for specialized or seasonal assistance lowers overhead and leaves more room in the budget for innovation.
- Templates and pre-approved legal copy make it easier to create purchase requisitions and other transaction documents. Pre-approved legal content, as well as standardized terms and conditions, can be easily inserted into contract templates to speed the contract creation and negotiation process.
- Accuracy and completeness of data are vastly improved by the use of data management, improving contract management, purchasing workflows, and communications and collaborations, both internal and external.
- Tiered eCatalogs/punchout catalogs provide a familiar “shopping experience.” The best vendor, terms, and pricing for any given item are automatically suggested to buyers. All data is available for spend analytics, eliminating maverick spend, simplifying the supply chain, and reducing risk from fraud and theft.
- Integration with existing ERP, accounting, and other software solutions connects procurement process improvements with the rest of the organization, who can provide additional strategic insights through automation and optimization of their own business processes using centralized data management.
Effective procurement has been traditionally associated almost exclusively with cost savings. Consequently, it’s no surprise that strategic and process improvements, properly applied, can yield even greater savings.
- Greater profitability is supported by data analysis and improved by increased discounts from early payment and other vendor incentives, as well as the elimination of late fees, duplicate orders, and fraud.
- Digital document management and storage in the cloud eliminates costly paper supplies, as well as the need for duplication and storage services.
- Duplicate spending is eliminated, improving both inventory management and the bottom line. Managed and unmanaged spend data provide context for areas in need of optimization.
- Total visibility makes it easier to spend against budget, without guesswork or incomplete data.
- Data analysis makes it easy to track spending by vendor, category or contract to identify opportunities for supply chain streamlining and contract adjustment.
- Complete spend data makes it easier to leverage economies of scale and get ideal pricing and terms from your most important suppliers.
- Automatic three-way matching eliminates costly errors and generates additional savings by speeding workflows and cycle times.
Embrace the eProcurement Revolution
It’s time to move beyond simple cost savings and into a world of value creation. The best fit for tomorrow’s best-in-class procurement organizations is a fleet, flexible, and fully integrated software solution. Make the switch to a comprehensive, cloud-based, and automated eProcurement system to achieve optimal spend management and process improvement while freeing your staff to focus on developing innovation instead of keyboard calluses.
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