How Can eProcurement Help Medium-Sized Enterprises (SMEs)
What is eProcurement?
Procurement software, also known as eProcurement, is used to purchase goods and services from suppliers.
Recent years have seen an evolution of eProcurement. Traditional eprocurement systems focus on procuring goods and services from suppliers via sourcing, eTenders and eAuctions. However, newer and more advanced systems on the market have expanded the scope of eprocurement to include other procurement processes such as Contract Management, Supplier Management, and Savings Management.
By implementing an eProcurement process, a company will be able to automate or standardize their procurement processes internally as well as externally with their suppliers, resulting in increased efficiency.
Benefits of an eProcurement Software
- A standard procurement process – outside of an eProcurement system, manual processes such as tendering for goods or services, managing and tracking purchase orders, supplier onboarding, contract management, evaluating suppliers, negotiating and reducing prices can be extremely time consuming. Nevertheless, automating such processes so that every employee follows the same procedure reduces not only time but also the chance of misplacing records or emails by having access to a comprehensive historical record of activities.
- The visibility of purchasing behaviour with eProcurement – eProcurement gives companies insights into how and where their money is being spent, who they have contracts with, and the amount of savings their employees are achieving throughout their procurement process. Insights of this kind can help companies take control of potential problems like maverick spending, identify areas of consolidation, and get a helicopter view of their contracts to ensure they do not result in expensive rollovers.
What are the main features of an eProcurement system?
The purpose of eProcurement is to standardize a company’s procurement processes. Within a cloud-based procurement software, tasks such as chasing a supplier for a contract signature and sending it via email to analysing an employee’s savings for the year can be automated, which in turn can reduce resource costs significantly.
- Sourcing (e-sourcing) – is the process of creating a bid, receiving bid responses, and evaluating the results of a tender all within one cloud based procurement solution.
- Contract Management – enables companies to keep track of all their contracts in one place, see an overview of their details such as contract end dates, and collaborate with their suppliers effectively, including sharing documents and approving documents.
- Managed Suppliers – this is the process of maximizing the value of a company’s relationship with its suppliers. Companies use Supplier Management to plan, manage, and improve their interactions with third parties that provide them with goods and services.
- Savings Management –Keep track of both projected and actual savings from cost reductions and cost avoidance, and export the data easily. Keep track of all your savings over time, by department, category, user, and location.
- S2C (source-to-contract) – is an end-to-end process in which a supplier is sourced via E-sourcing and a contract is created. In addition, Supplier Management may need to be performed.
- Procure-to-pay (P2P) – is the end-to-end process of acquiring goods or services from a supplier who is already well-known to a company. This involves an employee requesting what good or service they need, which is then approved by a senior manager, sent to the supplier to fulfil, and then through to payment for the supplier via an electronic purchase order and invoice.
- Reports & Analytics – modern eProcurement systems offer user-friendly analysis in the form of dashboards. Procurement and finance professionals can use this function to gain insight into their own procurement activities across the company and thus make better business decisions.
How To Choose The Best Procurement Software
Is the software able to override a company’s existing systems or processes?
Most modern cloud-based eProcurement software solutions outperform legacy systems that were mainly created as on-site solutions, making them more difficult and more expensive to maintain. Cloud-based eProcurement solutions are now increasingly in demand as they become more widely available to new markets such as SMEs. Cloud-based procurement software is more cost-effective to update and add new functionality to and some of them offer self-service, which means no hefty implementation costs or lengthy sales cycles.
Advanced Data Reporting & Analytics
Despite not knowing it, data has become a procurement department’s most valuable asset. By integrating purchasing, accounts payable, and contract management departments, cloud-based eProcurement technology can provide greater insights to decision-makers and enable improved visibility and control. With advanced reporting through user-friendly dashboards, procurement departments can now get insight into when their suppliers’ insurance is about to expire, when their contracts are to be renewed, or on what e-sourcing activity they have been awarded.
An online procurement platform that is accessible anywhere
Through cloud procurement, procurement software can be accessed from any device and from anywhere. By taking advantage of mobile technology, procurement processes can be more efficient, as well as collaboration will improve whether it’s approving a supplier document on a plane or creating an eSourcing activity that needs input from a team member while working at home. Using it, buyers and suppliers can collaborate more effectively and efficiently.
AI, blockchain, machine learning and other buzzwords
A company should not be tempted by technical jargon and functions that it is not ready for or that it does not need when purchasing eProcurement software. Take time to understand whether eProcurement platforms are right for your company. They can promise complete automation of your current processes. However, to make these ‘advanced’ technologies truly advanced, humans will still need to interact with them. When adopting these technologies, companies will also need to be aware that they will need to change other processes inside and outside of their procurement function to make them work.
Relationship between supplier and client that works
A business’s suppliers are perhaps its most important component. Assuring that the right relationship with suppliers is in place will only contribute to strengthening procurement departments and their processes. The same is true when it comes to using the right eProcurement software, as a modern solution usually gives suppliers access to its features. It is crucial that suppliers can easily access an eProcurement system and make full use of it if they are to upload documents when requested or to respond to an eSourcing activity on time.
ROI (return on investment)
Cost is one of the primary factors that companies consider when procuring software. The problem here is that the eProcurement software has historically been an on-premises solution with expensive implementation and maintenance costs. Today, companies (especially SMEs) can take advantage of cloud-based systems that were previously out of reach. There are more cost-effective and readily available solutions on the market today. Even though there is a cost associated with these software’s, companies should consider the long-term (and even short-term) return on investment. For instance, determining how much it would cost to roll over a contract without being notified in advance and the time it takes to gather 10 suppliers’ responses by email for an eSourcing activity, as well as evaluating them.
Conclusion
oboloo was created to assist SMEs in reducing supplier risk, saving time working with their suppliers, and enabling them to find the best value suppliers.
oboloo is a cloud-based procurement software that gives users full control over every aspect of the procurement cycle, from sourcing and contract management to supplier and savings management. oboloo also encourages SMEs to promote their values to suppliers and work with suppliers who share their values.
oboloo was designed to be intuitive and simple to use, with proven processes that produce measurable results every time. It is a self-service platform that has four easy-to-use modules.
Everything is included in one monthly subscription, there is no long-term contract required, and there is no implementation fee.
