E-procurement: Definition and Benefits

Nowadays, the way many people interact with each other has changed because of technology. Since the Internet has become all encompassing and information now moves extremely fast, procurement management can also be done far more effectively than in the past, when it was mainly done through phone calls, snail mail, email and fax. In the digital age e-procurement allows buyers to accomplish their tasks much more quickly – it takes less time to find suppliers, negotiate, contract, deliver and analyze the outcome. So, our today’s article is devoted to electronic procurement.

For many managers the thought of moving to an e-procurement process gives chills. Most are worried about the fact that e-procurement is too complicated and opens their organization up to errors of different nature. Another cause of concern – the time it will take the whole team to learn a new process. Even though some individuals have preconceptions about the e-procurement process, its advantages outweigh disadvantages.

E-procurement benefits are becoming more evident as the wider understanding of its many uses becomes apparent. The main reason companies have embraced e-procurement is to provide visibility into everyday transactions, increase productivity and make it easier for users to get the items they need.

What is E-procurement?

Electronic procurement (also e-procurement) defines the automation of procurement and supply chain processes using web based applications. This expands the idea of enterprise resource planning (ERP) systems, allowing the automation of internal business processes, thus providing a platform that supports automation at a global level. E-procurement allows purchasing professionals all over the world to transmit information simply and efficiently, streamlining the global procurement process. Furthermore, it reduces time and costs without compromising on standards and quality.

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E-procurement Software

It is important to understand that e-procurement benefits can only be fully realized when the systems and processes to manage it are in place. E-procurement is facilitated by e-procurement software. One key feature of e-procurement software is that it allows employees to search through online catalogs as well as select and purchase needed goods and services online. Remember, a comprehensive, fully integrated e-procurement approach is essential for overall company success.

E-procurement applications allow employees to manage their own purchases, from the selection of the desired items to submitting requisitions and tracking the delivery status. As it was mentioned above, this automation streamlines the procurement process and makes it more efficient, thereby making it faster and less costly. It also removes low-value tasks from the procurement department, which can then redirect its resources to higher-value activities. The tools within many e-procurement applications allow procurement leaders to customize the procurement experience, determining which items will be available through e-procurement to which users. Many different types of procurement software, such as Precoro, also offer access over smart phones and tablets.

E-Procurement Precoro

Precoro is a leading software that aims to help automate the entire procurement process for businesses in many diverse spheres, from pharmaceuticals to office supplies. Precoro cloud platform has attractive interface, it is user-friendly, flexible and does everything it promises for a good price. Precoro is compatible on many different platforms, including Windows, Mac, Android, iPhone and iPad. Users can access the system and work from anywhere, taking advantage of real-time updates.

Benefits of E-Procurement

E-procurement can produce significant benefits for the companies that implement it. It can reduce transaction costs, increase visibility of enterprise procurement spending and deliver better reporting of procurement trends and metrics through automation. Let’s focus on the most significant advantages of e-procurement process.

1. Reduced Costs

E-procurement saves money by lowering transaction costs, preventing duplicate spending and leveraging volume buying. In addition, it allows you to save costs associated with paper-based systems.

2. Eliminated Paperwork

E-procurement system management is especially advisable for people tired of finding new space to store all the paperwork. With e-procurement, everything can be saved and stored electronically. E-procurement not only saves you from needing more room, it also makes the process of finding older tenders simpler.

The development of e-catalogues has also enabled organizations to market their product offer electronically. This has been a fantastic marketing tool for both sellers and buyers, as there is price transparency – buyers can compare offers from various e-catalogue vendors.

3. Increased Productivity

Once you have learned the system, you can see that e-procurement is less time-consuming than traditional procurement. Electronic storage of the records makes it easier to submit reusable tenders. By automating business processes that are typically handled by employees, e-procurement free up time for the team to spend on more strategically significant tasks. For example with automated matching of invoices, goods can be ordered, processed and paid in a matter of minutes. The key, however, is to ensure that the supplier is set up in the buyers systems support as much automation as possible.

4. Transparent Spending

By conducting your procurement electronically, it is easier to write and analyze reports on your procurement systems, meaning you can ensure that your procurement procedures conform to your policies.

5. Increased Transaction Speed

E-procurement is both time-saving and efficient. As the electronic handling of tasks supports and simplifies the purchasing process, transaction speed is increased. Also, because of e-enabled relationships with suppliers, procurement cycle times speed up. The e-procurement process eliminates unnecessary activities, allowing you to focus on more valuable tasks. By applying e-procurement strategy, individual business activities can be completed much more quickly. Transactions are not restricted by office hours and may not even need human intervention, thus increasing the capacity to complete transactions on a real-time basis. This means that downstream processes are not constrained by waiting for transactions to be completed.

6. Standardized Buying

When you have various departments making procurement decisions, there can be differences in what and how they purchase. Conducting purchasing electronically makes it easier for every department to conform to company procurement standards. Moreover, due to the fact that virtual e-procurement portals are web-based, buyers can search suppliers worldwide that contributes a wider selection of products and services available to the organization. It is great because even when items are not available locally, it is still possible to source them from any part of the world.

7. Simplified Global Procurement

With the e-procurement applications that support various languages, currencies, international taxation, financing and shipping regulations it is simple for buyers and suppliers in different countries worldwide to communicate and co-operate.