Organizational Implications of Introducing e-Procurement

Improving bottom lines is the aim of every business organisation. Whereas most businesses place emphasis on having sufficient marketing promotions or sales to achieve this, bottom lines are often compromised with the ineffective backend process and the lack of business spend transparency. This, however, can be solved through an e-Procurement system. In this article, we will help you understand more about e-Procurement and its advantages.

What is e-Procurement?

e-Procurement simply defined is a software or electronic platform that business organizations utilize to regulate their purchases. Purchase or sales of supplies, ERP (electronic resource planning), EDI (electronic data interchange), are all conducted via the e-Procurement system. This tool allows businesses to conduct their operations from a single platform to enhance transparency and accountability.

There are many advantages to using e-Procurement. They include:

1. Affordability

One of the benefits of the e-Procurement tool is that maintaining access to your primary purchasing tools does not come with a hefty price. Compared to the implementation of a full ERP, the subscription fees of e-Procurement as a standalone software is affordable, and you wouldn’t have to worry about hidden implementation charges.

2. Being Easy to Use

Spending an enormous time to configure a system for employees to use can be very daunting for many organisations, hence this is the reason why many companies may be less receptive towards implementing a new or changing a system.

Good thing is, this is not the case for most e-Procurement platforms. While many other systems such as the ERPs take months to set up, a well designed and user-friendly e-Procurement software takes little time to implement.

The e-Procurement system is designed to be easy to implement to allow smooth workflow when it comes to strategic sourcing and purchases.

3. It Enhances Relationship with Suppliers

One of the challenges faced with the procurement process of an organization is slow response and lack of motivation of suppliers fulfilling their end of the bargain.

The use of online purchasing tools by suppliers for the order receiving process enables them to respond quicker and more conveniently. By handling your transaction process through e-Procurement platforms, you are complying with the way most other businesses are operating and you are encouraging compliance from your suppliers.

4. A Great Way of Avoiding Vendor Lock-in Situation

Handling a procurement process manually makes it challenging to switch providers. One of the benefits of using the e-Procurement platform is that it allows easy switching of providers when you want to go for a system vendor that is better than the one you are using. It comes with options that make an organization’s transaction seamless.

With an e-Procurement platform, you can easily export purchase data and transaction records to spreadsheet format. The affordability of the e-Procurement software, multiple options, and ease of use means that you will find a convenient approach that will be easy for your procurement team.

5. Reduces Manual Paperwork

Handling of manual paperwork in the procurement process can be tedious and time-consuming. Sometimes, the paperwork will not be ready on time to facilitate procurement. With e-Procurement software, the procurement process is automated. It is automated in a way that each of the procurement processes is handled as easy and quickly as possible.

Errors are normally associated with manual processing of the procurement process. When this happens, it can be costly for the business organization as it could face dispute investigation and litigations. The e-Procurement process ensures that human error is minimized and there is increased transparency.

6. Increases Employee Productivity

An e-Procurement platform boosts efficiency and productivity. It reduces the amount of time needed to complete procurement processes, approvals, and payments. By automating tasks that had been done manually, the staff is freed from low-value tasks such as paper processing and data entry. This way, employees focus on activities that are highly impacting to spur the growth of the organization.

7. Eliminates Confusion and Enhances Collaboration

Employees normally run into confusion during the purchasing process and other internal and external collaboration involved. E-Procurement centralizes communication to ensure that there is a proper collaboration among the staff. From a central point, communication between the staff is established. Every stakeholder is brought on board of the procurement process.

8. It Reduces Company Cost

A good e-Procurement tool ensures that you save cost through ensuring procurement policies are complied in the organisation and improve the efficiency of the overall procurement processes. Digitalising processes also allows companies to minimise costly errors which may occur with manual ways of working.

Also, with better visibility on company spend and consumption allows procurement teams to be a better position to negotiate for contract pricing which translates into cost-saving.

e-Procurement has proven to be helpful for many business organizations in Malaysia and around the world. Seeing the benefits that e-Procurement tools have to offer, organizations should consider integrating it into the business to make the procurement processes easy and smooth. To find out more about this powerful tool, feel free to get in touch with our friendly specialists today.

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