All You Need To Know About Procurement Software
Procurement software is a business application that enables an organization to automate the process of purchasing cycle. The fundamental use of the software is to simplify the process involved between a supplier and a purchaser of an organization.
Procurement software functions include raising and approving orders, examining tenders, selecting and ordering goods or services, invoice and order processing, tracking payments of goods or services, ensuring the accuracy of the order and its delivery and many more.
Business organizations can compare several orders before making a purchase decision, and allow suppliers to bid for their business. The choice of procurement software varies according to the strength of an organization. A multi-national organization or any large corporation will use a shared procurement system to cut down the cost of purchases.
The prime benefits of using procurement software are time-efficient administration, long-term cost savings and access to information on goods or services. Business owners can easily track organizational spending effectively using such software. They can also manage large vendors who are operating with large corporations to make cost-effective purchase decisions.
Here are some features of procurement software:
Requisitions: Create a request to purchase a product
Vendor follow up: Generate automated reminders to confirm purchase orders
Inventory management: Enable businesses to maintain physical inventory of goods.
Payment Settlement: It is all about creating financial related transactional reports of goods or services received physically.
Document management system: Archives all necessary documents
Electronic signature: A tool to sign various documents online
How Organizations Should Leverage Procurement Software To Enhance Their Business Productivity
According to Business Wire, the global procurement software market is forecasted to reach USD 9.6 million by the year 2026. The market is expected to register a compound annual growth rate of 9.4% in 2021.
Today, several procurement leaders may lack necessary tools or expertise to enhance the productivity of their organization. Therefore, a collaborative implementation of procurement software is essential either for merely conducting a comprehensive spend analysis or manage inventory from time to time effectively.
Seamless Implementation
Software companies define processes and policies to create implementation documents, configure the system before fulfilling requirements. While businesses focus on the necessary technical requirements, it is also important to have an idea of how to gather supplies from all businesses, which results in maximum return on investment (ROI).
Introducing new contract management, supplier and catalogue management practices requires an end-to-end analysis of an organisation. An inefficient process may lead to manual interventions, which results in maverick buying and low visibility for an organization.
An organization that is willing to purchase procurement software should identify the best available features and vendor's ability to guide through the entire process of designing, configuring, testing and implementing a system to gain maximum returns.
Modular Architecture
Generally, procurement leaders face several challenges that result in long working hours for their team. They can leverage a holistic procurement solution, which can scale from a single module to a seamlessly interconnected ecosystem as per the evolving business needs.
Some of the popular modules are:
Electronic procurement
Request for quotes
Purchase order and Invoice management
Supplier catalogue management
E-auction
Purchase requisitions
Contract management
Data Migration
Identifying the processes that need automation and software support are essential. In addition, there are certain processes with just manual intervention that need priority during migration. Businesses should consider the source and the kind of data that passes into the software and protect data integrity to avoid the need for manual data cleanse.
According to CrowdStrike, 66% of surveyed organizations experienced a software supply chain attack. And 90% of those respondents incurred an average financial loss of $1.1 million.
Security
Cyber threats are increasing exponentially. Businesses need to take necessary measures that mitigate risks, protect their finances, reputation and ability to conduct business. Several businesses are turning to cloud computing solutions, as they simply cannot afford security attacks. This gave rise to a new e-procurement software platform.
According to Harvard Business Review – The problem with procurement, 56% of procurement professionals feel their technology has significant gaps. These drawbacks are hurting their purchasing process and destroying productivity.
Customized Reports
As businesses evolve, the need for new data insights will emerge. Therefore, companies should understand the factors that are driving success and areas that need improvement. An agile procurement team should ensure the platform supports customized data views and real-time reports. Procurement software that fails to support customizable reports will undoubtedly have a negative influence on businesses.
Business Agility
The new normal caused due to pandemic has made real ramifications of security attacks seem common. It is very crucial to be agile, wisely respond to change and benefit from change rather than waiting for the disruption to come. In simple words, a software solution should address the rising need for business agility, which requires a solid IT infrastructure.
The most significant recommendation is to consider the needs of tomorrow before selecting procurement software. Organizations' needs will increase as it grows and the need to migrate to new software solutions could have adverse effects on growth.
