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HOW GOING DIGITAL CAN STREAMLINE YOUR PROCUREMENT PROCESS

By Procurement Article | 2023-10-03

For businesses, integrating technology and considering digitalisation can have profound implications, such as better decision-making, deeper consumer insights, enhanced collaboration, and more.

As a result, over 85 per cent of organisations are looking forward to adapting appropriate technologies and broadening their digital access, according to a survey by the World Economic Forum.

It is proven that every process tends to be impacted by its incorporation and procurement is a significant domain that could be effectively improved. With e-procurement, businesses can change how they obtain supplies while saving costs and refining efficiency.

It allows organisations to automate several tasks, which streamlines procurement operations, reduces supply chain disruptions, enhances supplier relationships and enables teams to deliver greater value.

By going digital, enterprises can further mitigate procurement risks, remove approval bottlenecks and reduce overall costs.

Mitigating
procurement risks
Businesses often come across several procurement risks, which can be the result of an outdated procurement system.

The risks can include inaccurate needs analysis, inadequate vendor management, no supply chain risk management, poor procurement planning and more, which could potentially hamper the business’s performance.

For dealing with them efficiently, e-procurement can be a viable solution, which can not only help businesses move away from outdated and manual processes but also give them the power to control costs and mitigate risks. Automated procure-to-pay (P2P) software solutions in this regard could efficiently lower these risks, streamline P2P cycles and enable businesses to purchase smarter.

Removing approval bottlenecks
Manual intervention in business processes is prone to errors, and procurement is no exception. In a system where decisions are made based on people, approval delays and mistakes lead to a domino effect of inefficiency and lost production that can snowball into a catastrophe.

In this regard, an efficient e-procurement tool can help identify pain points, which can include single points of failure. In addition, it can streamline workflows to reduce staff involvement and the number of steps required. Moreover, the e-procurement solutions can reduce the approval bottlenecks of the procurement team by automating admin tasks such as deadline adherence, arithmetic calculations, approval routing, and more.

Reducing
overall costs
In a survey by PwC, the surveyed leadership executives stated that their organisation planned to keep cost reduction a top priority. In this regard, e-procurement solutions can help businesses reduce overall costs as they
make the processes transparent, efficient, and controllable.

Primarily, an
e-procurement system ensures businesses work with the best suppliers at the best price at all times.

Moreover, it can save the companies from maverick spending as a robust P2P system enables them to create approval structures, workflows, and assign user permissions to ensure purchase requisitions are reviewed before an order is placed. Moreover, it has the capability to identify duplicate spending and save time and effort in recouping excessive spending.

All things considered
In a bid to improve their business performance, organisations are advised to harness the benefits of digital technologies in their procurement cycles.

With the appropriate technological intervention, the companies will be able to move away from outdated procurement systems, automate their tasks, and solve supply chain disruptions. E-procurement in this regard can effectively aid organisations in reducing costs, improving efficiency, mitigating procurement risks and removing approval bottlenecks.

However, businesses are still required to pursue e-procurement software that is modular, secure, flexible and scalable, as it will provide them with an apt competitive edge.

According to research by Mordor Intelligence, the market size of procurement software is anticipated to reach 12.04 billion by 2028, with a CAGR of 10.20 per cent from this year.

The factors driving this potential growth are the growing significance of digitalisation streamlining procurement processes, and reducing the duplication of records.
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