Update 1/19/2017: This post has been updated with additional top advantages of eProcurement software for businesses.

With the emergence of new age collaborative business practices and better analytics, eProcurement software is emerging as a natural extension of prevalent systems to bring transparency, automation and efficiency into purchase processes. Increased competition has forced the companies to outsource its non-core activities and to focus more on building expertise in a specific area; in such a scenario, productivity and agility of your supplier directly affects your business performance. eProcurement, thus is getting on top in the list of priority for CIO as its moving from a luxury to a must have solution.

Advantages of eProcurement software to Your Business

Biggest challenge with the ERP systems is its ability to interact beyond intranets; moreover, there are data migration, change management and security issues. The cloud based e-Procurement software system, which can interact with your ERP and offers a web based environment to your suppliers, fits as a best solution to this problem. It makes it easy for your supplier to interact with your procurement team, as they have limited access to the information and there are no security issues as your ERP is not directly accessible to outside your internet. If you are still non-decisive on implementing eProcurement, below are some benefits that can help you convince your team for transforming the purchase practices in your organization.

1. Eprocurement help you reduce cost

According to the University of Jakarta study1 on eProcurement software implementations, organizations that move to electronic procurement experience the following benefits:

  • Reduced off contract spend by 64%.
  • Reduced prices by 7.3% for spend brought back onto contract.
  • Reduced requisition-to-order cycles by 66%.
  • Reduced requisition-to-order costs by 58%.
  • Increased total spend under management of procurement group by 20%

Additionally, there are indirect benefits like inculcating best practices into purchase process, institutionalization of process reducing dependency on individuals, increased collaboration with suppliers, transparency, auditing, & so on.

2. Eprocurement brings Transparency on Expenditure

Eprocurement software brings much needed transparency and automation in your purchasing system. With the centralization of supplier information, purchase data and integration with ERP, the purchasing dashboard becomes more uniform and improves visibility of organization leadership. It’s easy to validate and keep a track of

  • Supplier shortlisting process
  • Evaluation methodology
  • Initial quotes
  • Negotiation tactics and outcome
  • Purchases orders
  • Requisition and approval mechanism.
  • Payments, taxes and other information.
  • Compliance with the contracts/obligations.

With such granular visibility, transactional issues that are hampering the managers to achieve organization objectives surface and the trend become evident over a period of time. Insights & objective data paves way for tackling the issues head-on and small incremental steps gradually lead to larger transformation.

3. Productivity

According to the study quoted above, eProcurement software reduces the procurement cycle time by more than 50%, you can bring all your purchase activities under the control of procurement team by including more and more categories and establishing catalogs and rate contracts. The maverick purchase activities reduce and structure approach to handling sourcing emerges. The supplier buyer relations gets a new high with increased transparency and agility along with the longer term visibility, the procurement department can focus on strategic categories and add value where it matters most.

4. Control and scalability

Eprocurement software helps you standardize your procurement/approval workflow for each transaction, the supplier database is centralized, compliance, audits and legal issues becomes easy to handle, your contract with the suppliers are centralized, making it easy for your to track the supplier performance. The deviation becomes easy to control, scaling the standardized process becomes easy as your organization grows.

5. Innovation and eprocurement

Many renowned companies in recent times have used outsourcing as key to their innovation. Airtel is one such good example, they have outsourced their technology function to IBM and are able to focus on marketing and brand innovation. The key to this engagement is transparency in supplier relationship. Similarly Apple Inc is able to transfer its manufacturing to Chinese suppliers and focus on design innovations. The core of these activities is innovation in supply chain and esourcing which enabled these companies in taking their offering to the next level.

If you are thinking of creating the new big dent in universe, then you need to collaborate with your suppliers who fit your needs. And e-Procurement software is a must to ensure seamless integration.

There are many Procurement software available in the market, the fact is to understand that what software type will satisfy your business need? and select the software accordingly. Before taking decision you can go through the list of Top Procurement software with different access methods at softwaresuggest.com or you can talk to software experts at SoftwareSuggest.com for the right software suggestion.