- Procurement management software streamlines and automates the procurement management process from beginning to end.
- Automation and improved supplier management, contract management, spend management, and strategic sourcing are significant benefits of a procurement management solution.
- Some procurement platform must-haves include a user-friendly interface, change management processes, a smart dashboard, mobile-friendliness, compliance and audit capabilities, and dynamic reporting.
Now more than ever, procurement and supply chain teams are looking for ways to increase automation, trim costs, streamline operations, simplify workflows, and expand their reach. Pre-pandemic, these might have been desired goals, but post-pandemic, they are absolute necessities. With today's supply chain pressures, we need to spend less time dotting i's and crossing t's and more time focused on strategy, right? So it’s safe to say the pressure is on.
Procurement management software is the most efficient way companies can meet those needs while still adhering to important procurement processes. In 2018, procurement software application revenues were around $5.3 million. But by 2024, those revenues are expected to reach nearly $6.4 million. This means that companies all around you, including your top competitors, will be adopting a cloud-based procurement platform soon if they haven't already.
If you're considering a procurement solution for your company, keep reading. In this post, I'll walk you through the benefits, some must-have solution features, and share some insider tips from my experience implementing and using this type of solution.
How procurement management software can transform your business
Procurement management software strives to streamline and automate the procurement management process from beginning to end. In other words, it is supplier management, spend management, contract management, inventory management, and the entire procure-to-pay lifecycle, all in one robust and scalable application.
Before we dive into the benefits of a procurement management platform, it's important to point out that the benefits you'll see from such a platform will depend heavily on several factors. Some of those factors are:
- Your company's business processes
- The platform you've chosen and its functionality
- End-user adoption
Now, let's go through some general benefits you can expect from using a procurement management solution.
If you're shuffling paperwork and chasing approvals, you've probably already recognized that isn't the most efficient use of your time. Procurement management software takes manual processes and automates them into one system, including all your approval workflows.
When the pandemic began in 2020, many companies realized that electronic signatures sufficed after all. That original ink signature you thought you needed went by the wayside. Manual approvals aren't just a headache for procurement teams; they delay other organizational teams from getting products and services they need promptly. If you use a procurement platform to automate approval workflows, you'll soon see approval processes become a non-issue.
Purchasing forms can also often be created in procurement systems as templates, ready to use time and time again without recreation.
Purchase requisitions, approvals, purchase orders, and sometimes even invoices and payments are automated in the system, and you can monitor them in real time. Yes, it's pure automation bliss.
Supplier management simplified
If you have many suppliers, you already know how daunting supplier relationship management can be without a solid system in place to help. The great news is that many procurement management solutions today offer supplier relationship management components that simplify the onboarding process and the ongoing management of each supplier.
Are you ready for no more vendor spreadsheets and missed strategic opportunities?
Reimagining contract management
Managing contracts, especially if you're responsible for SaaS buying, is not a task for Excel or your trusty legal pad. I can attest to that because once upon a time, that's (Excel) exactly how I managed several hundred of them or at least tried to.
How can an organization make the most of its strategically negotiated contracts if it doesn't even know what all agreements it has or its terms?
Today's procurement software solutions take a cumbersome and seemingly impossible contract management process and turn it into something organized and efficient. If you've ever had to negotiate your way out of a late cancellation, missed a renewal window, or missed a significant pricing change, you'll appreciate the benefits of contract management.
Spend management oversight
Have you ever been asked to report spending, requiring data pulls from multiple systems and lots of pivot tables? And then you still didn't end up with what you needed? I have. Before my organization implemented procurement management software, spend analysis was a request that kept me up at night.
The complexities of some spending, like software, are far too vast for traditional ERP reporting, especially if you need to break down spend by type of solution (SaaS, on-prem hosted, remotely hosted, etc.). So instead, procurement platforms usually offer detailed spend management with configurable reports, giving you constant oversight of spending down to the most granular, line-item level.
And, of course, higher spend visibility equals higher accuracy in spend control and budgets.
Streamlining strategic sourcing
You might have heard of procurement management software, also called e-procurement software. In its original state, an e-procurement platform handled the RFx process, whether it was a request for quote (RFQ), request for bid (RFB), or request for proposal (RFP). Today, many e-procurement solutions are part of more extensive procurement management solutions.
With the right procurement platform, you can quickly enter your sourcing requests into one system, collaborate with stakeholders, invite and engage with potential suppliers, review proposals, and make an award.
Procurement management software must-haves
What are some features to look for in a procurement management application? You've probably already got some great ideas after running through the benefits described above. But, you'll want to create a must-have list aligned with your company goals and needs.
Here are some things I recommend considering.
Change management isn't quite a feature or functionality, so you may be wondering why it's topping this list.
Whether the solution will be a mandatory part of the company's operations or not, you won't see maximum benefits without proper change management plans. People seem to fear and resist change less when they are aware of the change, understand why they need to change, and feel they are a part of the change. Depending on your company size and how purchasing is structured, a procurement platform may be a significant change.
Your procurement management software needs to be from a SaaS supplier with which you can develop a strategic partnership. Part of this partnership can include utilizing the supplier's expertise and resources to assist with change management. Look for a supplier who is eager to be involved. After all, the right supplier will want their solution to be a raging success for your company, too.
This is the first screen end users and admins will see when they access the application. An optimal dashboard will provide action items and task lists, data relevant to the person viewing, easy access to catalogs, forms, and other components frequently used by the user. For example, if that end user requests new Marketing software often, that category should show up for easy access..
We hear the words "user-friendly" a lot, but what does it really mean? It means you want a solution that anyone can pick up with minimal training and use with ease. It can be anything from auto-populating fields to an admin being able to reconfigure an approval workflow quickly.
Single sign-on (SSO)
There will be other security and risk-related needs your IT security team will recommend, but I'm recommending this one for a different reason: ease of use. The platform being easy for end users to access will increase adoption rates. If your end users can access the procurement system with the same login credentials they use for other company systems, it will be easier for them and result in fewer "help, I can't get into the system" requests.
If your organization uses an ERP system, you may need your procurement platform to integrate. In my case, we were using Ellucian's Banner ERP, and finding software that could play nicely with Banner was critical. Of course, the integrations often cost extra, so that's something else to consider. Does your company have systems that will need to integrate with its procurement solution?
At the beach and get an urgent request for a purchasing approval? If your procurement platform has a mobile app, you can access it from any mobile device within seconds and get back to your sandcastle building.
In addition to the apparent flexibility and convenience of accessing systems using mobile devices, it also adds a layer of protection if your work laptop or desktop machines are temporarily unavailable.
One of my favorite features of the Unimarket procurement solution my organization used was the ability for admins to "switch" into the role of an end user. In other words, if someone called and had hit a snag in the system, as an admin, I could switch myself into their role to see exactly what they saw. This was a critical piece of troubleshooting and helping our teams learn and use the system. Trust me, your system admins and trainers will need this.
Compliance and audit trail
If your accounts payable processes require a three-way match, make sure the selected platform accommodates that and any other compliance requirements your company has.
When changes are made within the system, no matter what those changes are, a good procurement solution will record those changes, the date and time, and who made them. Using the user-switch functionality as an example, any time you switch into another user's shoes, the system should know that and make a note of any changes you make on that person's behalf.
Canned and configurable reports
Beyond the need to report spend, we've all got metrics and KPIs we're tracking, right? Look for a procurement solution that comes with pre-configured (or canned) reporting that includes things you'll frequently use like purchase requests, purchase orders, invoices, and payments.
But also look for the ability to configure reports to meet unique needs. For example, does the system permit admins to configure reports, or will you be required to enter a request to the SaaS supplier for those?
Training and support
How will users be trained to use the new platform? How will the supplier support your teams? Look for a SaaS supplier with a clear roadmap for training and support that matches your company’s needs. Bonus points if the supplier has a knowledge base of tutorials and FAQs and even more bonus points if they have a customer panel and annual conference.
Transform your organization with procurement technology
When my former company began the RFP process for a procurement solution, I created it in Microsoft Word, sent it out to suppliers via email, and requested proposals on flash drives with one "original" for my trusty cardboard box records. Thankfully, after only six months of using the awarded platform, that cumbersome process seemed like a distant memory.
Your current purchasing processes may look a bit different than mine did, but I'm confident that with the right platform, you'll realize tremendous benefits of your own. For even better news, there are so many more options available today than when my organization did an RFP.
Today, procurement management software solutions optimize procurement and drive value to where the organization needs it most. So, what are you waiting for?
Do you want to focus more on implementing critical procurement technologies and less on managing an ever-growing SaaS stack? Contact Vendr to learn more about how we can help.