April 20, 2018

How Strategic Sourcing Changes the Rules for Procurement Software Selection

How Strategic Sourcing Changes the Rules for Procurement Software Selection

“If you don’t drive your business, you will be driven out of business.” – B. C. Forbes

Any procurement software would work well to track transactions but is this enough to qualify for strategic sourcing software? What used to be called purchasing functions have evolved themselves into processes of strategic sourcing that form the supply chain management. The programs that enable you to manage strategic sourcing are on the market and are generally sold under the labels of procurement software, within the ERP systems, Supply Chain Management Systems and also as standalone products. Organizations often gets misled to a point where they believe in letting the technology manage their transactions and provide them with visibility so we become strategic.

So, how is Strategic Sourcing different from shelfware software that lets you manage transactions digitally?

The Integration Factor

Application Programming Interface (API) integration should be the first technical check on your wishlist. Without seamless API integration to your ERP your newly purchased software becomes a shelfware.

Healthy Supplier Network

E-procurement software provider’s supplier network should be a deciding factor before purchasing procurement software. Many e-procurement providers will feature a network of registered suppliers from which users can create new vendor relationships and integrate their existing suppliers.

Customizable or Configurable: Striking the Right Chord

One should really understand the difference between a customizable and configurable system. Configurable generally performs out of the box and has the ability to change as per your needs to deliver the required functionality you seek. On the other hand fully customizable software translates to a price tag that might hurt you initially. A good ratio of customization and configurability works well and does not make a hole in your pocket.

All In All: Look Outside the Realm of ROI

ROI calculation is a vital tool in ERP system companies should look beyond that and establish KPIs (Key Performance Indicators) to validate the success and failure of ERP systems. There are labour benefits associated with ERP and reduction in paper you buy. It is vital to have KPIs outside the ROI calculation, such as customer interaction and boosting the efficiency of supply chain. Too much reliance on mere financial indicators can be simply termed as bad business.

To sum it up, think about a software platform built for procurement professionals by procurement experts. An overall procurement solution that propels better efficiency and performance, particularly designed to streamline and automate Procure to Pay (P2P) processes which will precisely lead you to the future of strategic sourcing.

Think Strategic, adopt Moglix’s Procure to Pay!