5 Reasons to Opt for e-Procurement
The advantages of e-Procurement are becoming more and more apparent as companies around the world have started to get a wider understanding of its many uses. The primary reason why companies are embracing this change is to increase productivity, enhance visibility into daily transactions while making it easier for users to have access to the needed supplies.
Even though the road hasn’t been an easy one and the implementation of e-Procurement has seen significant challenges, business managers and procurement departments have come to accept and understand its advantages. If you’re still unsure about how e-procurement seeks to benefit your business, let us tell you why you should opt for e-Procurement:
- Cost- Reduction: By leveraging volume, structuring supplier relationships and making system improvements for the reduction of external spending and upgrading quality/supplier performance, companies can efficiently achieve significant cost reduction with e-Procurement eliminating rework, errors and paperwork.
- Visibility of Spending: By centralizing the transactions and their tracking, the ease of reporting on requisitions, processed orders, purchased item and payments are enhanced, while at the same time ensuring compliance with existing/established contracts.
- Productivity: By enabling internal customers to obtain items from pre-approved item catalog through an on-line requisition and ordering system, the release of procurement staff from handling low-value orders/transactions, can be facilitated. Thus e-Procurement can enhance productivity by letting the staff focus on strategic sourcing and improvement of supplier relationships.
- Control: By standardizing approval processes/workflows ensuring the right authorization per transaction, spend can be directed to the drawing off of existing contracts. This also helps in improving compliance to policy, with users being able to locate products/services quicker from preferred suppliers, reducing the creation of maverick purchases.
- Usage of Technology: By using software tools like electronic requests for information (e-RFI), requests for quotation (e-RFQ) and requests for proposal (e-RFP) for the creation of standard procurement documentation, organizations can make the best-priced framework agreements, thus helping in long-term cost-reduction and enabling companies in re-routing and utilizing their resources towards more strategic initiatives.
The advantages of e-Procurement are significant when it comes to bottom-line benefits like process efficiencies, spending controls compliance etc., tell us what you think about the benefits of e-Procurement for businesses in the comments section below.