9 Best E Procurement System Benefits
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e Procurement Systems: Nine Benefits.
e Procurement is a relatively new concept where an organization can deploy one centralized system and unify the majority of its procurement functions in one platform.
Some of the benefits experienced may include:
- Online catalogs from approved vendors
- Internal ordering processes
- Electronic Request for Proposal (e-RFP) process
- Online auctions (e-auctions) to accumulate bids on providing goods and services for a specific project.
This article will outline some of the significant benefits that a company can experience when they deploy an integrated E Procurement system.
If you are looking to understand the challenges associated with E Procurement, please read – eProcurement Integration Challenges Simplified
The Nine Benefits of deploying an E Procurement Systems
E Procurement Systems deliver Process Controls and Governance.
Procurement organizations do not always worry about what commodities or supplies were purchased. They are concerned about understanding who engaged in the process. Paper and spreadsheets can track most of the details but tend to provide opportunities for fraud. What if somebody alters what was on that paper midway through the purchase? The fact is, with older systems, there is no fail-safe way to monitor and track all of the steps.
Enter E-Procurement systems into the conversation. With Electronic Procurement systems, you can develop and monitor a comprehensive path of precisely who participated in the process and what their contributions were. If someone makes modifications to an order during the process, you can see when and where they did it. Better still, you may have the ability to stop the changes in the first place.
Likewise, process audits end up being a breeze, considering that there is an in-depth history of all modifications to each demand right there in plain sight for everybody to see.
E-Procurement Systems Facilitate Process Automation
A typical issue with traditional systems is human mistakes. A human enters the wrong numbers. A human mishandles a spreadsheet. A human goes on a trip and does not authorize an order before they leave.
Modern E Procurement systems utilize automation to manage these typical issues. In an electronic procurement system, you can automate the information entered, so your numbers compare each time and get rid of the uncertainty.
Does your current process require somebody to authorize a high-priority purchase? Instead of walking that paper from desk to desk, an e-procurement system can email each approver in sequence and let them make approvals right from their inbox to move the purchase along.
What is someone who is sick and misses a day of work? An E Procurement system will enable your company to delegate approvals immediately send out the appropriate information to the next approver in line to keep things streaming and keep your service moving.
Streamline the Budgeting Process
Comprehensive spending plans are a necessity for every single company. With a traditional system, budget plan computations are mostly computed by hand or in spreadsheets. Spreadsheet-based processes do not provide enough visibility across the process. There is a lack of controls for approvals on over-budget purchases, and one incorrect keystroke can spell doom. The implementation of an E-Procurements system can help govern all of this and enable users to manage the budgets and plans actively.
A Best-of-breed E-Procurement system will not only provide alerts on budget issues, but it can also alert approvers if there is a sudden shift in demand against the plan.
Real-time Process Visibility
The procurement and sourcing functions in an organization involve a tremendous amount of cross-department collaboration. When you deploy a modern E-Procurement system, you can set up dashboards to enable stakeholders from teams outside of procurement to monitor the status of the purchasing, including who is currently managing the process. They can also gain access to valuable documents such as requisitions, purchase orders, and invoices.
When all potential stakeholders can have visibility and can participate in the process, it will enable the team to be agile and enhances their overall efficiency.
eProcurement Integration Challenges
Procurement and Purchasing Process Controls
E-Procurement systems permit higher versatility and control over every element of the buying procedure. The entire process can be made transparent. Restrictions can permeate all steps in the process, including but not limited to, who can input, authorize, and execute an order through the actual approval and payments.
Also, once all of the information within the process is digitized, you can enable real-time business analytics and process monitoring for the interested members in your company.
When you can see all of your orders from a supplier in one location, extraordinary things begin to take place. You can start to:
• Combine comparable orders to make the most of bulk discount rates
• Communicate to suppliers just how much you invest with them to work out new discount rates or better pricing
• Identified non-preferred suppliers to stop orders to conserve cash
This type of metadata isn’t readily available with a traditional system.
These days companies need every advantage they can get over their competition. It is no longer good enough to get the best price on a commodity. You now need to a comprehensive supply chain optimization strategy. Having a modern E-Procurement system can enable you to maximize the value of your supply chain.
E Procurement provides End-to-End Procurement Process Transparency.
Every high-performing organization demands that there is transparency across the procurement process.
Modern E-procurement systems can help provide a comprehensive window into many aspects of your process, including spend analytics, contract management, PO, Billing, and sourcing events.
Information can be shared across your organization quickly and with high accuracy allowing for more informed decisions for the entire organization.
You can examine metadata to discover areas where you can enhance your procedures. Maybe you will find locations where approvals experience delays—suppliers where you can consolidate purchases from to get better pricing. Opportunities, where you can pay invoices to both, make the most of early pay discount, on-contract vs. off-contract invest, and more.
Systematically Reduce Rouge Spending
Rogue costs are a huge problem for numerous businesses. Around forty percent of procurement staff members confess to having gone rogue– purchasing a product without correct approvals, or purchasing a various product than what was authorized. With paper and spreadsheets, it can be simple to conceal or mask a rogue purchase. Not so with e-Procurement systems. Having an electronic audit path that never disappears is an effective deterrent to rogue spend in and of itself.
Conserve Cash
Changing to an e-Procurement system can not just save your company process time. It can also save your company material amounts of money. These savings may take many forms, such as reducing fraud, minimizing maverick spending, negotiating new pricing, and maximizing early pay discount rates.
Through all of this, there is also is the potential to experience Procurement headcount reduction opportunities.
An e Procurement system can revolutionize your procurement process. By enabling a modern procurement platform, you’ll enjoy these benefits, fewer headaches for your staff, and more money in your budget.
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