Benefits Offered by the Best Procurement Management Software
Procurement Management Software : When considering the “big picture,” the most obvious benefit of making the leap to an eProcurement software solution is freedom from the limitations of traditional procurement paradigms, coupled with greater competitive agility and strategic decision-making.
A 2019 report from research firm Level revealed Procurement Management Software offers substantial improvements across procurement. Companies who added a new procurement solution (or integrated one with their existing enterprise resource planning (ERP) systems) reported:
- Reduced lifecycle times for purchase orders, invoice processing, and other P2P workflows (56%)
- Improved spend transparency and visibility across procurement (52%)
- Improved spend control and security (50%)
- Supply chain optimization (41%)
- Invoicing consolidation and optimization (33%)
- Improved access to supplier performance metrics (33%)
- Less maverick spend (23%)
- More effective negotiations and more competitive pricing through improved supplier relationship management (20%)
But the benefits don’t end there. Let’s take a closer look at the specific ways in which a cloud-based procurement management solution such as Procurement Management Software can help your company automate and optimize your procurement processes:
- Centralized data management and easy integration with existing ERP systems—as well as accounting, marketing, customer resource management (CRM) and other applications—removes data silos, improves collaboration and communication, and enhances analytics by providing a complete, accurate, and readily accessible datasphere with a user-friendly interface.
- Templates for purchase requests, purchase orders, and other documents simplify and speed both creation and approval processes.
- Templates also make it easy to create new contracts, modify existing ones, and incorporate the latest actionable insights for maximum negotiation strength.
- Documents, including purchase requisitions, purchase orders, contracts, and more are auto-populated with complete, up-to-date, and accurate data from the central data server, improving internal, industry, and legal compliance.
- Standardization reduces waste and improves operational efficiency. Purchase order approvals and invoice approvals can be automated further to provide even greater efficiency and savings through the use of preset spending limits.
- Automation and optimization of low-value tasks free staff to focus on more strategically valuable tasks, such as collaboration with suppliers.
- Standardization and automation improve risk management at all levels of the purchasing process through the use of internal controls to minimize deviations from standard operating procedure while still preserving the ability to make adjustments when necessary.
- Software-as-a-Service (SaaS) procurement software solutions keep costs low by reducing the need for on-premises IT staff, hardware, and software.
- Modular deployment means procurement teams can choose to go all-in with a full integration from the beginning or take a more casual approach as budget and business needs dictate.
- Support for global currencies, languages, and logistics means spend data can be captured and smoothly analyzed and integrated without delay, whether you’re buying raw materials from another continent or ordering office supplies from a local warehouse.
- Mobile-friendly, real-time access, coupled with process automation, provides strong support for contingency-based approval workflows that aren’t limited by time zones or staff absences.
Purchasing Power and Performance
- Process automation slashes processing times, eliminates human error, and improves accuracy for high-volume, time-consuming tasks.
- Digital data management and process automation remove the waste and expense of paper.
- Integration with vendor punch-out catalogs and guided buying provide a user-friendly, “e-commerce” style experience for buyers.
- Guided buying also ensures every transaction is made at the best possible price point and terms.
- Reduced cycle times and greater cost savings for both purchase orders and invoices through:
- Optimal purchase order management through elimination of incomplete, missing, or inaccurate purchase orders.
- Strategic payment options for accounts payable. Teams can capture early payment discounts when cash is plentiful, or preserve working capital by paying on time, preserving critical supplier relationships either way.
- Improved operational performance. Faster processing lifecycles mean goods and services are ordered, received, and paid for much more quickly.
- Elimination of both maverick spend and invoice fraud.
- Automatic three-way matching and internal spend controls create effective barriers to both “invisible” spending and financial malfeasance.
Supply Chain Optimization
- Analytics and Procurement Management Software tools allow teams to leverage economies of scale to secure better pricing and terms, pursue both project- and contract-based supplier management, and bring formerly siloed areas of spend into a centralized data management paradigm.
- Vendor portals make it easier to onboard suppliers and perform strategic sourcing. Vendor management KPIs can be used to track supplier performance and compliance, identify your most valuable vendors, and integrate your systems with suppliers’ to create new processes that benefit both parties.
- Real-time access to vendor compliance and performance data also improves procurement teams’ ability to rehabilitate or replace underperforming vendors and remain actively engaged to promote strong relationships that can lead to new projects, products, and markets.
- Machine learning and advanced data analytics provide the tools necessary to harvest actionable insights that improve decision making and spending strategies—and craft a resilient supply chain that has the contingencies and redundancies required to protect operational continuity against supply chain disruptions in an uncertain global economy.
Procurement as a Value Center
- Process optimization through automation and analytics, with full support for Lean, Six Sigma, and other continuous improvement models, allows for evaluation and refinement of processes across procurement and the organization.
- Fully transparent, accurate, and complete spend data improves the quality of data analysis. Financial reporting and planning, strategic decision making, and overall business process management can now incorporate both return on investment (ROI) and Total Cost of Ownership (TCO) as metrics.
- Inventory control is improved through access to spend and inventory data in real time, reducing waste and eliminating duplicate orders. Leaders can more effectively analyze inventory management data to predict usage patterns and adjust spending strategies.
- Value modeling and insight-driven strategic planning can reveal additional opportunities to reduce risk, improve profitability, or pursue partnerships.