Supply chain disruptions cause millions to business entities every year. Therefore, resilient procurement strategies are essential for growing organizations, particularly for small and medium-sized businesses. Many of these disruptions result from a lack of automation and illogical adherence to outdated processes. Modern businesses are devoted to digitizing their organizational processes to streamline work, and supply chain management is no exception.
Modern procurement management solutions are dominated by e-procurement services, which are becoming increasingly prevalent in all types and sizes of businesses. E-procurement, or electronic procurement, is the B2B process of ordering, purchasing, and requisitioning goods and services on the digital landscape. The digitized process results in efficient management – a priority concern in standard procurement processes – and streamlines supplier relationship management through bids, purchase orders, and invoices. In short, e-procurement systems provide a complete and comprehensive platform for buyers and suppliers to interact over the internet!
If you’re a small or medium-sized business owner who’s still on the fence about whether to use e-procurement systems or not, here’s an article telling you to use one for all the right reasons. We’ve made a well-researched list of benefits of using e-procurement systems for SME owners. Let’s dive right in.
The Benefits of Using E-Procurement Systems
Help You Stop Using Paper Documents
Paperless offices have been one of the most noticeable changes in the private sector in recent years. Digitization has helped businesses automate many critical organizational processes. E-procurement does the same thing and also removes the reliance on paper documents.
Paper manufacturing is a resource-intensive process with many adverse effects on the environment. E-procurement can help alleviate the strain paper manufacturing puts on the environment. The digitized management system provides comprehensive one-shop-fits-all solutions for sourcing and procuring materials without using a single sheet of paper.
In addition to being eco-friendly and supporting the environment, e-procurement systems are also easy to use and more efficient than paper documents. You can use them to take care of every aspect of procurement processes while maintaining industry standards. They eliminate stacks of paper that clutter desks and make getting tasks done difficult. Going paperless also increases productivity by clearing up time for employees by eliminating the need for recordkeeping.
Similarly, e-procurement is also faster since you only need to search for important files using the electronic database, and they’ll be retrieved for you in seconds. So, no more looking through heaps of files in cabinets and lockers and wasting time!
E-Procurement Increases Transparency
Maintaining supply chain transparency is a growing concern in traditional businesses since company funds can be misused, and policies can easily be violated. E-procurement systems solve this problem by allowing staff to view contacts, check terms and conditions of contracts quickly, and measure supplier performance metrics to ensure everything is up to standard. The digitized system also prevents the misuse of information and data while maintaining transparency.
In addition to performance metrics and KPIs, e-procurement tools also offer supplier ratings to business owners. Buyers can rate suppliers based on their performance, quality of materials, and adherence to contracts. This creates reliability and helps other buyers carefully choose or interact with suppliers based on their ratings.
E-Procurement Systems Help Track Hidden Expenses
Minor recurring expenses can take a heavy toll on a business’s growth. Additionally, it also doesn’t make sense to generate purchase orders for these or even one-off purchases since they might cost you more than the actual purchase amount.
An e-procurement system, on the other hand, automatically registers and tracks all activity, including minor expenses, through the associated General Ledger (GL) accounts available on the system. As a result, both tracking and making minor purchases are easy with e-procurement systems. They also improve auditing efficiency and accuracy by accounting for every spent cent.
They Reduce Human Error
Unlike computers, humans are prone to making mistakes. Errors in the procurement process can result in financial losses for the business and negatively affect productivity. In contrast, an automated e-procurement application mitigates the risk of human error in multiple processes, such as budgeting, data transfers, accountability, and buyer and supplier communication.
Additionally, they free up time for the employees to focus on other day-to-day aspects of the supply chain. E-procurement systems can even select the best buyers based on the history of similar purchases and simplify the whole process for all involved parties, increase control, and reduce the possibility of human errors!
Automate Tedious Procurement Processes
Creating new paper documents from scratch for suppliers is a tedious and dreadful process in procurement. However, e-procurement systems automate this process, so employees don’t have to create new PO, RFQ, and other related documents from scratch. Instead, you have the option to create multiple templates of these documents, which the e-procurement application can use to complete recurrent orders – an autopilot mode for procurement processes.
E-procurement systems conveniently store all information such as files, reports, assignments, orders, and contracts for automating processes. One of the benefits of this automation is that it saves precious time, which can be used elsewhere by employees to boost productivity and business growth.
Additionally, e-procurement systems can also create templates for contracts. A procurement professional only needs to put in the type of contract, amount of money, and indicate the subject while the software application takes care of everything else. As discussed before, this reduces the amount of paperwork and the frequency of human errors.
E-Procurement Is Affordable and Easy to Implement
Although we’ve reached the end of this article, there are still so many benefits left to explore. It shows how important it is for business owners to use e-procurement systems to promote their business and grow it beyond their expectations. The digitization process is straightforward to implement and easily affordable.
Microsys is one of the leading software and cybersecurity solution providers for small and medium-sized businesses, and their e-procurement software is just for you. SimplyPurchasing is a cloud-based e-procurement management solution that offers all of the above mentioned benefits and numerous others, from reducing costs to giving you a competitive edge and eliminating transaction disputes. It requires an extensive hardware setup and can easily be deployed on existing workplace devices.