Procurement Software: A Cheat Sheet for Your Digital Revolution
Published on 01/17/22 |
5 min read
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The ‘New Normal’ is already here. With it comes a question:
How does a decades old supply chain infrastructure adapt to the realities of the pandemic decade?
One answer is the full spectrum commitment to the Digital Revolution. And one of the best steps a company can take to commit to the new digital landscape is to invest in modern procurement software.
Keeping up with changing external conditions is harder if your procurement team uses outdated enterprise resource planning software (ERP). These systems can be notoriously rigid and don’t allow for effective and flexible procurement management. External regulatory, technological, and economic factors can further constrain a business’s procurement activities. Procurement managers have little control over these influences, making spend analysis and cost savings challenging.
Using project-centric procurement software is the first step toward meeting policy requirements, scaling operations, and growing your business in the new normal. The supply chain 4.0 is here, and when it comes to procurement software, it's sink or swim.
An e-procurement process is a procurement-first solution that is customizable and easy to deploy for simultaneous projects. Below, we take an in-depth look at the benefits of using procurement-first software.
Various stakeholders participate in the procurement process, including procurement and inventory managers, vendors, requisition specialists, and account management.
When each party uses their own platform, the process creates multiple information silos. Meaning each subsystem operates in isolation. The resulting disconnect between stakeholders will greatly reduce the efficiency potential of your procurement process.
On the other hand, procurement-first software provides a centralized 'single source of truth' for all procurement-related communication and transactions. Implementing modern procurement software allows for seamless collaboration between all parties, saving valuable time and money.
The inability to effectively track expenditures is one of the costliest drawbacks of manual procurement systems. When the procurement process lacks transparency, stakeholders often end up approving redundant expenses, executing off-contract purchases, or committing transactions that don’t meet company policy (maverick spends).
Procurement software with centralized, flexible tracking capabilities lets your team identify and eliminate redundant and dark purchases and improve spend management. Procurement-first software also allows for:
Failing to detect and address vendor performance issues can significantly affect the efficiency of your procurement process . However, manually tracking vendor performance is time intensive. Procurement managers need to sift through extensive amounts of data to gauge each vendor’s rating parameters, including:
● Quality of goods or products
● Price stability and accuracy, clear billing, and early price change notifications
● Delivery at the correct times and quantities
● Quality of additional services, such as complaint handling, technical support, or emergency support
High-performance procurement software provides a central, up-to-date source of vendor data. It also flags potential issues, making early detection possible.
Eliminating maverick spending and ensuring policy compliance are critical procurement objectives. It’s important to check each transaction to ensure the invoice, contract, purchase order, goods receipt note, and service entry sheets match. Critical data to monitor includes:
● Per-unit pricing
● Transactional terms
● Product descriptions
● Line-item quantities
Manually checking each document for discrepancies may take a long time, but failing to do so can result in duplicate payments. A procurement system with an automated invoice-matching feature eliminates delays and ensures all documents have correct information.
Vendor management is a complex operation requiring regular input from both your procurement team and the vendors. Without a central communication and transaction platform, interactions between your business and its suppliers can be clumsy and error prone.
A procurement app with a vendor portal provides suppliers with a self-service platform where they can:
● View purchase orders
● Add tracking numbers
● Upload invoices
● Manage catalogs
● View the status of their payments
A self-service portal saves time because vendors don’t have to contact your procurement team with questions or updates. This feature also helps to nurture your relationship with high-performing vendors.
A procurement process relying on manual input is highly susceptible to errors and bottlenecks. If you don’t have an effective procurement system, you don’t have uniform, standard procurement procedures. The result is non-compliance with procurement policy, costly errors, and a high workload on your accounting and procurement teams.
Implementing a robust digital system will streamline your procurement operations, preventing the duplication of your teams’ efforts. By automating various procurement systems, you eliminate errors, protect sensitive information, and derive optimal value from your human resources.
Interactive smart workflows allow the proper approvers to review and confirm procurement activities at any stage of the process.
Managing your procurement risks is critical to ensure your business’s survival and long-term growth. However, without a sophisticated procurement planning and forecasting tool, you chance leaving your business vulnerable to several potentially devastating procurement risks:
● Inaccurate internal needs assessments
● Poor supplier selection
● Disorganized and clumsy vendor management
● Insufficient contract management and non-compliance with industrial regulations, resulting in fines and penalties
● Non-compliance with internal procurement policies
● Manual processing errors, such as approval delays, documentation mistakes, and lost data
● Procurement delays
Deploying a modern procurement process that incorporates well-honed solutions is your first line of defense against such unnecessary risks.
Access to accurate and up-to-date information is crucial in formulating and implementing a sound procurement strategy. However, if you need to deal with data silos, outdated spreadsheets, and emails, making truly informed decisions is near impossible.
By implementing a robust procurement system, you have access to updated information that is easy to access and interpret. These systems allow you to gather key metrics, identify trends, gain actionable insights, and help you streamline your procurement process.
Quality procurement software helps businesses save on technology and infrastructure expenses, access procurement expertise, and reduce risks.
Current SCM is designed for project-based procurement teams. Procurement solution providers who use Current SCM can seamlessly and cost-effectively manage multiple procurement projects for different clients. Current SCM also allows a business to seamlessly integrate its supply chain for maximum efficiency.
If your business wants to align its procurement with the digital revolution, use Current SCM.
Related Reading: What You Need to Know About Direct vs. Indirect Procurement
