Monitoring & Evaluation Software
With the emergence of new age collaborative business practices and better analytics, e-Procurement 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. E-Procurement, thus is getting on top in the list of priority for CIO as it’s moving from a luxury to a must have solution.
If you are still non-decisive on implementing e-Procurement, below are some benefits that can help you convince your team for transforming the purchase practices in your organization.
- E-procurement helps you reduce cost
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.
- E-procurement brings Transparency on Expenditure
E-procurement 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 short listing 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 your managers’ achievement of organization objectives surface and the trend becomes evident over a period of time. Insights & objective data pave the way for tackling the issues head-on and small incremental steps gradually lead to larger transformation.
According a study, e-Procurement 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.
- Control and scalability
E-procurement 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.
- Innovation and e-procurement
Many renowned companies in recent times have used outsourcing as key to their innovation. Airtel is one such 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 e-sourcing which enabled these companies to rise to the next level.
If your organization’s goal is to change the world as we know it, then you need greater collaboration with better suppliers who fit your needs. A smart e-Procurement system is a must have to ensure seamless integration.