What to look for when choosing a procurement solution
A procurement solution is a piece of software designed to streamline the procure-to-pay process. By automating manual processes and increasing visibility into spend, procurement software solutions can help organizations improve operational efficiencies, shorten the purchase cycle, cut down costs, eliminate maverick spend, and drive profit to the bottom line.
For growing companies, the procurement process is often too complex and time-consuming to manage using the rigid procurement module available in enterprise resource planning systems (ERPs). Dedicated procurement software will help organizations of all sizes automate sourcing, requisitions, invoice processing, and spend management.
Depending on your company’s needs, procurement leaders can choose procurement management software that focuses on purchase orders, invoice approval, and supplier management. Or, you can opt for an all-in-one e-procurement solution that also addresses strategic sourcing and contract management.
Need help choosing the right procurement solution? Here’s an overview of the different types of solutions available, as well as the features your chosen solution should have.
What are the types of procurement solutions, and what problems do they solve?
Procurement solutions are technological tools that help businesses enjoy cost savings and streamline their purchasing workflows. Digital procurement systems manage invoices, suppliers, and orders, as well as make sure that compliance standards are met.
Functional procurement solutions
Functional procurement solutions automate different functions in the procurement lifecycle, like purchase requisitions, purchase order management, invoice approval, and supplier management.
Here are some of the manual purchasing functions these systems can automate:
Procurement solutions automate creating, managing, and tracking purchase requisitions in an organization. Whenever a stakeholder identifies a need for a new purchase, they create a purchase requisition in the procurement system, which is then validated by the requestor’s manager and the procurement team.
Approved purchase requisitions are automatically converted to purchase orders. These purchase orders are then forwarded to suppliers or service providers. They’re also stored in a centralized location for easy accessibility.
Goods receipt notes (GRNs)
Whenever a functional manager receives their product subscription details, they’ll create a goods receipt note acknowledgment in the system. This also provides an opportunity to leave comments or raise a complaint about any issues with the SaaS licenses purchased.
These invoices will then go through an approval workflow and an automated three-way matching process where the invoice, purchase order, and GRN are compared to alleviate any discrepancies and inconsistencies.
The supplier management module stores all supplier-related information, purchase orders, invoices, and any existing contracts in a centralized location. Some functional procurement solutions also offer an option to nurture supplier relationships with value-added features like supplier performance feedback.
The main function of an e-procurement solution is to standardize and consolidate the core procurement processes within a single system. E-procurement solutions are designed to inject transparency into spend and streamline approval workflows. In addition to offering an ecosystem of procurement modules, e-procurement solutions also improve spend management, reducing the chance of dark purchasing.
One of the most important considerations when choosing an e-procurement system is how it can help your business grow and meet new demands. Here’s an in-depth look at what features should be present on e-procurement software:
Three-way matching is a system of quality control for businesses that involves checking incoming invoices against the purchase orders and goods receipt notes before payment is processed. An automated three-way matching provides an extra level of protection against errors and fraud, and helps businesses save money by identifying mistakes early.
Spend visibility is important because it allows SaaS purchases to be tracked. This in turn helps the company stay within budget and ensures money isn't wasted on unnecessary items or services — an important element to financial stability. It also generates cost savings and aids software negotiations and renewals. Using this data, procurement teams can achieve their goals with ease.
Dashboards provide a bird’s-eye view of an organization's purchasing activities, which helps procurement leaders identify issues and opportunities. For instance, you may be unknowingly paying for the same tool multiple times. Your sales team could have a subscription to Mailchimp for cold email campaigns while your marketing team uses the same tool to send newsletters.
You might end up paying twice for Mailchimp subscriptions without even noticing it. An ideal dashboard will highlight such instances of duplicate purchases and encourage you to resolve them. Additionally, dashboards can help track trends over time and spot potential areas for cost savings.
Related: 2022 SaaS buying trends report
How procurement solutions can save your company money on SaaS
With a procurement solution by their side, teams can clear up the paper trail and email clutter, making SaaS procurement hassle-free. Here are three ways in which procurement solutions can cut down costs on SaaS procurement.
Capture all the apps used
A procurement management platform helps companies keep track of all the apps they use. The solution captures all the information about each SaaS product, including who’s using it and how it’s being used. This tech stack management helps businesses make better decisions about which apps to keep and which to get rid of.
Eliminate dark purchasing
Procurement solutions eliminate dark purchasing by giving insight into the purchasing process. These solutions analyze all relevant inputs, including stakeholders’ credit card statements to the existing SaaS stack template to find any instances of dark purchasing.
Empower cost savings
The usage and utilization data provided by the platform can be used to negotiate lower prices with SaaS providers. This data provides information on how the product is being used, which lets you know if you are overpaying or underpaying for a certain pricing tier. Understanding your usage of a software, and the value you provide as a customer, can give you leverage when renewing your contract.
Procurement solutions that can streamline your purchasing process
Procurement solutions enhance the existing purchasing workflows and streamline the entire SaaS purchasing process from start to finish. Here are two procurement solutions that can streamline your SaaS buying experience.
Vendr is a SaaS purchasing and management solution that provides visibility into how much you're spending on what applications, as well as insights and recommendations about optimizing procurement to generate cost savings. What’s more, Vendr takes SaaS negotiations off your plate, making the SaaS purchasing process and renewals hassle-free.
The SaaS procurement process has been a pain point for many organizations. Zip makes it easier to see all of your company's purchases in one place, identify potential problems before they become real issues, and approve requests faster than ever before. What’s more, it’s an easy-to-use, no-code software solution that can be deployed in as fast as six weeks. Zip works with Vendr to provide one place for employees to initiate purchase or vendor requests and sits on top of ERP, procure-to-pay, CLM, ticketing, and other systems.
Learn what happens when you work with Vendr
Get an inside look into the platform where you can discover and buy new tools, see how much you're saving on software, and stay up-to-date on all of your deals with our free guide to the Vendr SaaS buying platform.