E-procurement software options to consider using in 2022

Key takeaways:

• E-procurement software has been a hot topic for the past few years and shows signs of exponential growth by 2026.
• E-procurement software automates every step of the procure-to-pay process.
• Pocket-friendliness, accurate budgets, lower paperwork, better supplier relationships, streamlined workflows, transparent business processes, and actionable insights are some of the benefits of implementing an e-procurement system. 
• Must-have features for e-procurement are centralized storage, on-the-go tracking, real-time collaboration, up-to-date catalogs, proactive spend analysis, seamless integration, and automated workflows.

E-procurement software is no longer a competitive advantage; it has become a necessity. A recent report on e-procurement trends forecasts that the e-procurement software market will reach more than $9.6 billion by 2026. By implementing an e-procurement system, organizations can enjoy both time and cost savings. Moreover, highly administrative procurement functions like sourcing, requisitioning, and more can be automated effortlessly.

Procurement process automation offers organizations benefits ranging from process transparency to spend management and optimization. However, selecting the right e-procurement solution in a crowded market is anything but easy. Businesses need to evaluate each potential e-procurement software provider and draw up a pros and cons list before arriving at a decision. 

To help businesses in their hunt for an e-procurement system, this blog covers what e-procurement software is, the benefits of e-procurement tools, and features to look for in e-procurement software. 

What is e-procurement software?

E-procurement software is a technological solution that streamlines key activities in the procurement lifecycle. The best e-procurement software covers all areas of the procurement management process, from needs identification and purchase order processing to contract management and supplier management. These tools free up the procurement department from administrative tasks and allow them instead to focus on high-impact tasks in the purchasing process, like decision-making.

What are the benefits of e-procurement software?

With an e-procurement platform, organizations can enhance the efficiency of their purchasing process, solve inherent maverick spend issues, and deliver savings to the bottom line. The right procurement management software can offer many indispensable benefits to any organization. Listed below are seven key benefits that procurement teams can enjoy by implementing the right tool.

1. Pay-as-you-go

Unlike on-premise procurement tools, e-procurement software neither demands a huge upfront investment nor requires constant upgrades and frequent maintenance. Today nearly all e-procurement software systems offer a subscription-based pricing model that covers everything. 

2. Accurate budgets

Maintaining accurate budgets is always a challenge in the manual procurement process. When you don't have a clear view of your spend, “dark purchasing” will take free reign and your carefully crafted budget plans will go down the drain. With e-procurement software, a centralized procurement database coupled with insightful dashboards and rule-based workflows keeps procurement spend in check and highlights any off-budget spends instantly.

3. No paperwork

When all your data is stored in outdated tools, stakeholders are forced to spend most of their time managing those spreadsheets. Siloed interfaces also result in data redundancy and demand too much manual intervention. E-procurement software solutions store all purchasing records in a centralized database, making it easy to quickly retrieve and compare information.

4. Better supplier relationships

In a manual procurement environment, vendor management services are typically an afterthought. E-procurement systems, on the other hand, place high importance on supplier relationship management with supplier engagement initiatives like supplier networks and self-service portals. 

5. Streamlined workflows 

The approval process in paper-based procurement is cumbersome and time-consuming, and procurement managers often have to run after stakeholders to get approvals or gather important information. With E-procurement software, automated approval workflows will send timely notifications to stakeholders, keeping them informed of events like contract expiration, three-way matching failure, and more. As a result, there will be no more missed renewals or lost early discounts.

6. Transparent business processes

When the purchasing process depends on outdated tools like spreadsheets and paperwork, stakeholders have no visibility into the procurement process. A business user who raises a purchase requisition to acquire a SaaS application might have to pester the procurement team to know the status. In an automated environment, the business user can log in to their account, find the purchase requisition they raised, and discover its status in just a few clicks. 

7. Actionable insights 

When purchasing data is scattered across paper files and folders, procurement managers must manually collect all pertinent information and feed it into analytics software to retrieve purchase-related insights. E-procurement systems have a built-in analytics module that leverages artificial intelligence and machine learning to turn raw data into actionable insights.

What are the features to look for in an e-procurement system?

The market is full of e-procurement software. To identify the best software for your business, you need to take a closer look at what each system offers. Listed below are eight must-have features of e-procurement software.

1. Centralized storage

With a cloud-based database easily accessible to all stakeholders, procurement managers can finally bid adieu to their loyal yet dysfunctional spreadsheets. When all procurement-related data is stored in a centralized location, data redundancy goes down, and so does the need for constant manual intervention.

2. On-the-go tracking

Tracking is an integral part of the procurement process, be it procurement managers tracking spend or analyzing the real-time performance of their suppliers. Up-to-date data is crucial for proper decision-making. With an e-procurement solution, both stakeholders and procurement managers can track any aspect of their procure-to-pay process with 360-degree visibility and role-based access controls.

3. Proactive spend analysis

E-procurement systems gather spend data from where they live and automatically classify the data based on organization and industry standards. Businesses can capture and group data based on the spend category (across suppliers, departments, products, and more) with customizable, visually rich reports.

4. Seamless integration

The procurement process cannot operate in a silo, and it needs to work in tandem with the accounting software, enterprise resource planning (ERP) systems, and other third-party tools. An e-procurement solution can exchange data seamlessly with other third-party tools with the help of application programming interface (API) integration and built-in connectors.

5. Automated workflows

Procurement workflow automation helps route approvals and purchasing documents efficiently without manual intervention. What's more, these automated workflows keep track of important aspects like contract compliance and supplier performance and send timely alerts to stakeholders whenever there is a potential breach. 

6. Real-time collaboration

Today all e-procurement software offers a self-service portal to suppliers, enabling them to communicate their concerns and queries right within the system — and all of this information can be documented for future reference. What's more, organizations can collaborate with their suppliers across the globe in real time to inquire about goods received notes (GRNs), accounts payable status, and more. 

7. Up-to-date catalogs 

Procurement teams no longer have to constantly get in touch with suppliers to keep their catalogs up-to-date. Automated verifications in e-procurement software send notifications to preferred suppliers to fast-track updates and streamline inventory management. What's more, some e-procurement solutions come with a built-in Amazon punchout option, which empowers stakeholders to make an e-commerce purchase right from the system.

8. Accurate three-way matching

Organizations can enforce compliance across the supply chain and rein in dark purchasing with automated three-way matching, which compares invoices with purchase orders and GRNs to ensure consistency. 

Eliminate your procurement woes with the right e-procurement software

Moving away from a paper-based procurement process to an e-procurement system can deliver a lot of value-added benefits for organizations of any size. Good e-procurement software can streamline the end-to-end procurement process, eliminating labor-intensive and heavily administrative processes. 

As you explore the e-procurement software market, you will learn that a ton of options are available. Before you choose an e-procurement system, take the time to understand your business needs. Also, identify where your current procurement processes fall short, and create a shortlist of e-procurement platforms with the potential to meet your requirements.

Are you yearning to spend more time implementing e-procurement software and less time organizing your SaaS stack? Contact Vendr and see how we can help!