6 Ways Procurement Software Can Automate Your Procurement Processes

In today’s global businesses, procurement’s role has evolved from being just a tactical team focused on cost reduction to a strategic entity driving enterprise-wide value and delivering sustainable business results. To meet the inevitable rising expectations, procurement organizations must transform their legacy processes, practices and structures, and align them with the current needs of the enterprise.

The term “procurement” by itself is an all-encompassing umbrella covering every source-to-pay (S2P) process – from spend analysis, sourcing and invoice management to contract management and accounts payable. Procurement organizations perform these processes to procure critical and non-critical goods and services necessary for the smooth functioning of an enterprise, at the best value.

Archaic methods of using pen and paper, spreadsheets or other semi-manual processes simply fail to deliver the level of scale, efficiency, analysis and results that huge enterprises demand, and that is where procurement software makes its presence felt. Procurement software makes complex processes easier, faster and more efficient, helping Procurement as an organization deliver on business expectations.

What is Procurement Software?

Procurement is known as the strategic process of locating and acquiring the goods and services that a company requires. Procurement also establishes controls that protect against risk and cost inefficiencies.

Procurement software is a business software that allows enterprises to automate their entire source-to-pay cycle. Right from analyzing and managing spends to managing contracts and making invoice payments, users can gain complete access to control every procurement process operation.

An organization can use a collection of capabilities provided by procurement software to facilitate the purchase of products and services. Procurement tools enable employees to practically request a purchase from anywhere worldwide, freeing up critical resources required elsewhere.

Employees can swiftly and precisely communicate their needs to the procurement department, working at a satellite office on a PC or out in the field on their phones. Procurement software reduces the administrative hassles associated with order management and offers a simple procurement procedure that the procurement team can use.

Benefits of Procurement Software

Reducing the overall number of hours spent preparing purchase-related documentation is made possible by procurement software. In doing so, a company can reduce the possibility of human data input errors and use the time saved to focus on priority business initiatives.

Accounting systems and procurement software can communicate through integration, ensuring that all transaction data is logged accurately in your record system. Concerning what is available through their procurement software, organizations have a great deal of power and flexibility.

Data-driven procurement systems give organizations more flexibility in how information gets transferred through the procurement process through various integration possibilities.

Procurement software was once an array of stand-alone modules focused only on improving individual processes, but today it can be purchased and implemented as a unified procurement platform to help enterprises automate and optimize the entire S2P process cycle.

Unified procurement platforms focus on automation of the following S2P processes:

Spend Analysis: Comprehensive analysis of historical spend data lays the foundation for a successful strategic sourcing program. Spend analysis software cleanses, validates, classifies and reports spend data from enterprise-wide source systems to deliver accurate, actionable information, with granular, item-level visibility across the enterprise. This data in turn helps in streamlining strategic sourcing waves, reducing maverick spend and realizing substantial savings.

Spend Management: Effective spend management software manages the end-to-end spend process — from opportunity to savings realization. The spend management capabilities of modern day unified procurement platform systems like GEP SMART^TM include spend analysis, sourcing, savings tracking, contract management, category management, supplier management and procure-to-pay. Such software ensures that optimal contracts help realize savings and makes certain that project goals are met.

Sourcing: Sourcing technology solutions help organizations quickly identify, evaluate and qualify new suppliers in addition to streamlining RFx-to-award cycles and helping enterprises achieve best-value agreements for every sourcing activity. Effective sourcing software enables enterprise-wide collaboration across offices and geographies to evaluate suppliers, author new RFPs and award contracts. GEP SMART takes the game a step further by flipping auctions into contracts and automatically initiating contract management and supplier management processes.

Contract Management: Contract compliance is critical to ensure that the savings negotiated transform into realized savings. Enterprises can reduce time and effort, and boost contract utilization and compliance with the help of contract management software solutions.

Supplier Management: Procurement software solutions with supplier management capabilities help in monitoring and managing supplier performance. It allows tracking and measurement of supplier performance, compliance and risk.

Procure-to-pay (P2P): Effective purchasing software (or P2P software) is designed to automate and optimize the entire purchasing process that includes entering a requisition, seeking approval, ensuring a three-way match and exception handling. It also includes supplier communication, relationship management, facilitating payment and reporting.

Once enterprises decide to implement procurement software solutions, the biggest question is usually how to identify the right product and the right approach: Whether to implement a complete integrated procurement platform or a stand-alone solution?