Digitization has changed business processes significantly, and supply chain management is no exception. Over the last two decades or so, many software tools and applications have helped supply chain professionals streamline the relevant processes. These digital solutions have improved efficiency, reduce errors, and enable organizations to improve their margins from within the existing system. E-procurement systems are among those software solutions that have become prevalent in industries in the 21st century.
E-procurement is a broad concept that entails business-to-business, business-to-government, and business-to-consumer sales/purchase of products and services through the internet. In the B2B context, it represents an electronic (digital) system where enterprises (buyers) and suppliers interact with each other. Most large-scale organizations have deployed e-procurement and spend management procurement systems.
However, decision-makers at many SMEs are still sitting on the fence regarding the use of e-procurement systems. This post is meant for all those who need some convincing on the benefits of e-procurement/spend management procurement systems.
Let’s look at why you should opt for an e-procurement system for your small-to-medium-sized enterprise.
1. E-Procurement Systems Help You Go Paperless
Going paperless has become a CSR agenda for many enterprises in the last couple of years. The resource-intensive manufacturing of paper and its adverse impact on the environment is now a well-documented issue. If you are mulling over revising and improving your CSR goals, adapting to a paperless working environment must be there.
An e-procurement system can play a significant role in ruling out the need for paper-based documents for supply chain operations. You can source and procure everything for your operations without using a single piece of paper. Going paperless with e-procurement systems means you can take care of every aspect of the procurement operations without missing any details and mandatory industry standards.
Besides helping you make your operations eco-friendly, e-procurement systems also allow you to de-clutter all the desks in the procurement/accounts department. There won’t be piles of POs stacked up on desks. Moreover, you don’t have to assign a staff member just for the recordkeeping of all the hardcopy procurement records.
Then, you don’t have to spend a lot of time retrieving a single file from the heap of papers. A quick search query not taking more than ten seconds will do the trick. All these little but significant things will improve the overall productivity of the procurement department.
To sum it up, “paperless” e-procurement systems won’t just make your organization an eco-conscious entity. It will also play a vital role in improving its efficiency and making it more productive.
2. They Improve Your Synergy with Suppliers
As mentioned earlier, digitization is affecting all sides and facets of the commercial landscape. The majority of suppliers you work with may have already moved to digital solutions. You can easily tell that by seeing the invoices sent by them. If you are still without an e-procurement system, those suppliers may find it harder to send you relevant documents.
By deploying an e-procurement system, you can easily “standardize” your operations with suppliers that are already using online tools. Maintaining this synergy or compliance with suppliers offers many benefits.
- You can cut down time-wasting back and forth between your procurement representatives and suppliers.
- Using standardized and customized RFQ and PO templates reflects your professionalism to all the new suppliers.
- The easy correspondence with suppliers helps you turn them into strategic partners for the long haul.
3. E-Procurement Systems Enable You to Track all Minor/Under-the-Radar Expenses
Generating a purchase order for minor outlays doesn’t make sense when dealing with such expenses. For instance, devising a conventional PO for some one-off service spending or coffee purchase might cost you more than that actual amount in terms of time and resources spent. In contrast, a robust e-procurement system enables you to register and track all those minor expenses through associated GL (General Ledger) accounts on the system.
This intuitive tracking offers twofold benefits. On the one hand, it makes carrying out minor company-authorized transactions easy for all employees. On the other hand, it makes tracking under-the-radar expenses easy for the accounts department. This detailed tracking makes auditing of every single cent spent possible.
4. They Help Reduce Costs with Spend Management and Control
When a centralized e-procurement system takes care of all the purchases, the enterprise gets better visibility of overall spending. There is a reason why a term like “spend management procurement system” has been coined. These digital systems provide the transparency that is difficult to acquire in conventional procurement management.
When you can get a bird’s eye view of all the overall spending, it becomes easy to pin down “expense black holes”. Identifying and slashing down all those expenses helps an enterprise improve its bottom line without scaling up or expanding operations.
5. Automate Monotonous/Non-Productive Procurement Processes
E-procurement systems enable you to create multiple PO, RFQ, and other related document templates. For recurrent orders, you can use those templates and put the procurement process on autopilot. This will save your procurement team from spending multiple hours daily on doing tasks that are neither exciting nor productive.
6. E-Procurement Systems Are Easy to Afford and Implement
Many SMEs don’t consider e-procurement systems for their operations because they think they are expensive digital solutions. Some decision-makers don’t go ahead with them because they believe the system’s deployment would involve many logistical resources.
Both assumptions are wrong. You can easily find e-procurement systems that are cost-effective and easy to deploy. SimplyPurchasing by Microsys is a cloud-based procurement management software that offers all the benefits we have discussed in this post. Its use won’t cost you a lot. Moreover, no extensive hardware setup and expert training are required to use it. Your procurement team can use it right away on the existing machines without needing dedicated workshops to understand its functions.