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    Blog Image

    Cloud-Based Procurement Solution for Businesses

    • CPOs in many organizations are keen on adopting cloud-based source-to-settle procurement solutions.
    • Such a solution streamlines the business’s procurement interactions and its spend culture.
    • With seamless integration capabilities, it can also deliver significant cost savings.

    September 13, 2022 | Procurement Strategy

    Businesses operate in an environment where technology is bringing about radically transformative changes in how firms are run — almost daily. Technology helps replace inefficient, legacy business practices with advanced productivity tools. Traditional procurement systems, riddled with inefficiencies, are no exception.

    Legacy systems are complex, have an extended implementation cycle, and require significant initial investments. Legacy packaged procurement solutions are inflexible, and the procurement teams waste much time and effort managing interfaces, rendering the procurement process inefficient. Also, the convenience and improved efficiency that these systems promised are never delivered.

    To overcome these limitations of legacy systems, procurement teams are turning to cloud-based procurement solutions.

    What is Cloud Procurement?

    A cloud procurement system is an integrated source-to-settle procurement suite that helps procurement teams automate business processes. It supports strategic sourcing, eases supplier relationship management and simplifies purchasing. The system has built-in collaboration tools and can deliver analytic insights. This helps manage the risks in the procurement process, enables operational agility, and enhances cost savings - leading to greater profitability.

    Streamline Cloud Procurement Process

    Cloud procurement helps streamline the procurement process by:

    1. Simplifying the purchase experience

    Cloud procurement simplifies the procurement team’s purchase experience, enhancing user adoption supported by a guided experience. The intuitive search features of the system allow users to quickly find the required goods and services at negotiated prices.

    2. Streamlining purchasing and payments

    Cloud procurement solutions streamline purchasing by automating the generation of purchase orders from approved requisitions. Revisions can be managed easily with complete tracking of change history. The system enables automated invoice generation, reducing errors and expediting supplier payments.

    3. Increasing business value

    Cloud-based procurement systems enhance business value by providing analytic insights. Value opportunities are identified by analyzing spend across categories, business units, locations, and cost centers. The system provides actionable insights on spending patterns to optimize your supplier base and negotiate better prices.

    Data-driven insights enable agile responses to new market dynamics. Insights can also be gained on supplier performance about contracted prices, service terms, and delivery times. These insights help in supplier diversification and risk mitigation.

    Advantages of Cloud-Based Procurement Software

    The benefits of implementing a cloud-based procurement system include:

    1. Ease of use and seamless integration

    Cloud procurement tools are easy to use and flexible. The system allows quick set-up and customization based on the business’s cloud procurement process, enabling a quicker time-to-market. Also, cloud procurement tools allow seamless integration through APIs, thereby eliminating data redundancy and the requirement of manual intervention.

    2. Cost-effectiveness

    Cloud procurement requires no significant capital investments in IT personnel or hardware or a hefty fee to use SaaS procurement systems. The available pay-as-you-use subscription plans help organizations of all sizes streamline their procurement process while keeping operational expenses low.

    3. Spend visibility and control

    Cloud procurement solutions provide complete visibility of the procure-to-pay process. The dashboard provides real-time visibility to track the process, identify problems, and fix them — increasing process efficiency. Users can also generate insightful reports that support informed decision-making and strategic planning.

    4. Accessibility

    Cloud procurement solutions enable anywhere, anytime access to the source-to-settle process. A device-agnostics approach ensures that team members can collaborate in real time from multiple locations to manage procurement tasks. This also means that vendors too have portal access for efficient transactions.

    5. Efficiency

    Cloud-based procurement software can streamlining procurement workflows, approvals, and processes ensure time and cost savings. Backend integration across systems can also improve data sharing and financial operations. Other than that, dashboards can provide additional on-tap visibility to further optimize spending and manage suppliers.

    6. Automation

    Cloud procurement software leverages automation across the entire source-to-contract cycle. AI capabilities can take over low-value repetitive tasks such as document filing, which can free up human resources for strategic work. Built-in controls and alerts enforce compliance in procurement processes. 
     

    How to Implement a Cloud Procurement Strategy

    The transition to cloud procurement can be streamlined with a planned strategy. The essential facets of the strategy include:

    1. Capture business needs

    It is important to align the procurement strategy with the organization’s business goals. The alignment can be achieved only by clearly understanding the organization’s business goals and priorities.

    2. Select the right cloud service and software features

    Select a cloud solution (SaaS, PaaS, or IaaS) that best meets the identified needs. SaaS solutions eliminate the need to manage complex hardware and software systems. The SaaS solution should provide efficient customer support, budget management, seamless integrations, customization, vendor management, etc.

    3. Robust security and flexible process

    The cloud service should provide robust protection with file encryption in the cloud and on your computer. Insist on the cloud provider having ICO and SOC certifications and being GDPR-compliant. The principal advantage of transitioning to a cloud solution is flexibility. Accordingly, the organization’s procurement process should also be flexible to be ready for ongoing and future growth.

    Key Features of Cloud-Based Procurement Software

    Key features of cloud procurement include centralized dashboards to manage suppliers and contracts, e-sourcing tools for RFPs and bids, ePurchasing catalogs for direct material orders, robust reporting for spend analysis, as well as payments integration. Cloud-based systems can easily connect with financial accounting software for efficient processing of invoices, receipts and payments. Overall, cloud procurement improves organizational agility and productivity while driving down costs.

    Conclusion

    Cloud-based procurement solutions score over on-premise solutions. Cloud solutions do not require a large upfront investment, increase business value through analytic insights, improve supplier collaboration and productivity, and do not require ongoing maintenance. The systems are convenient and can be accessed from anywhere using any device. All these factors significantly improve the efficiency of the procurement process.

    Frequently Asked Questions

    What are the future insights on cloud procurement?

    Cloud procurement is expected to standardize, streamline and automate the source-to-settle process. This will be powered by automation and social collaboration.

    Who designs a successful cloud procurement strategy?

    A successful cloud procurement strategy is designed with a collaborative effort between the CIO and CPO.

    What are the types of cloud procurement?

    The types of cloud procurement include Software as a Service (SaaS), Platform as a Service (PaaS), or Infrastructure as a Service (IaaS).

     

    Tags: Procurement Software

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