Whether your business is a Fortune 500 company or a family-run supermarket, inventory management is critical.
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.
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 SMART by GEP 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. SMART by GEP 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?
Market-leading companies today are pursuing “Digital-First” strategies, leveraging existing and rapidly emerging modern technologies such as artifi
With the demands on procurement becoming ever more urgent, CPOs in nearly all industries are coming around to the value of going digital.