eProcurement, also known as electronic procurement is typically known as the process of purchasing goods and services from a supplier via a procurement software.
eProcurement has evolved in recent years. Legacy eprocurement systems tend to focus on purely procuring goods and services from a supplier through a typical sourcing, eTender or eAuction activity, however, newer and more advanced systems on the market have expanded the scope of eprocurement to include other procurement processes such as Contract Management, Supplier Management, and Savings Management
The main benefit to a company adopting an eProcurement is to drive automation or standardisation internally as well externally with their suppliers to drive efficiency of their procurement processes.
The Main Benefits of eProcurement
- Standardising current procurement processes — manual processes outside of a modern eProcurement system such as tendering or auctioning for goods and services, document management for purchase orders, supplier onboarding or contract management, evaluation of suppliers, negotiations, and pricing savings can be extremely time-consuming. However, automating these processes so that everyone in an organisation follows the same procedure can not only save time however also reduce risk by having access to a comprehensive historical record of activities and minimise the likelihood of misplacing records or emails.
- Visibility of purchasing behaviours — eProcurement offers companies visibility into what they spend, who with, which suppliers they have contracts with and what savings their employees are gaining throughout their procurement function. This level of insight is invaluable to a company and can help take control of potential issues such as maverick spend, identifying areas to consolidate suppliers and gain a helicopter view of their contracts to ensure they do not result in expensive rollovers.
How does eProcurement work?
eProcurement is designed to standardise a company’s procurement processes. Manual tasks such as chasing a supplier to sign and send a contract on email to analysing an employees savings for the year can be automated within a cloud-based procurement software which in turn can reduce resource costs significantly.
- Sourcing (eSourcing)– is the process of carrying out an electronic tendering exercise with the creation of the tender, supplier responses, and evaluation of results all kept within one cloud-based procurement solution.
- Contract Management — is the process of a company having all of their contracts in one place, having a high-level view of their details such as contract end date and also being able to collaborate with their suppliers effectively with a function to share documentation with approvals.
- Supplier Management — is a process that drives the best value between a company and the suppliers they work with. Within strategic procurement, Supplier Management allows companies to plan, manage and improve interactions with third-parties that provide them with goods or services.
- Source-to-contract (S2C) — is the end-to-end process that begins with sourcing goods or services via eSourcing and creating a contract with that supplier. This often involves additional processes in between such as Supplier Management
- Purchase to Pay (P2P) — is the end-to-end process of obtaining goods or services from a supplier who is usually already known to a company. Typically an employee will put in a request of what good or service they need, this will then be approved by a Senior Manager, sent to the supplier to fulfill the request, and then through to payment for the supplier via an electronic purchase order and invoice.
- Analytics & Reporting — modern eProcurement systems offer a user-friendly analysis in the form of dashboards. This critical function allows procurement and finance professionals access to insights of their own procurement activities across the entire company and to make better business and buying decisions.
An eProcurement software will help any organisation to reach the objectives of its procurement strategy more quickly and efficiently benefit from the advantages listed above. This will then have a positive impact on the margins and reduce the internal resources required.
We provide cloud-based procurement solutions in the UK, whether for e-sourcing, contract, supplier, or savings management. If you want to take advantage of cloud-based procurement software, connect with us today to start your free trial at oboloo.com. oboloo enables organisations to be supplier smart.
