The Digital Transformation of Procurement
Now that most organisations have already gone digital transformations for their core accounting and HR functions, it’s likely you’re looking for the next business function to digitise and automate.
So, what’s next? With today’s technology and demand for better value-added services, procurement is a key area that is ripe for digital transformation.
Why eProcurement Now?
Procurement is Process and Interaction Driven, which could be Manually Taxing
As a function, procurement is tightly controlled and rightly so; we need to have checks and balances in place to ensure that expenditure is accounted for. As a result, procurement tends to generate a lot of paperwork (eg purchase requisition forms, purchase orders, delivery orders, invoices etc.), and this requires a lot of manual effort to keep the whole process going and up to date. Procurement also involves a lot of interactions as staff and suppliers must work together to ensure the right items are purchased, accounted and paid for at the right time.
When these processes are managed manually with paperwork, there are 3 key challenges that naturally drive an organisation to look for a better way of doing things:
There is a physical cost to managing and storing paperwork, but also, there is a resource cost in terms of man-effort and time taken to ensures processes are adhered to and that nothing is falling through the cracks.
The best supplier management tools ensure supplier communications and quotations are tracked and easily retrieved, deliveries are quickly recorded, invoices reconciled for payment, and organisational knowledge about each supplier is centrally managed, but doing this manually is a huge drain on resources. When done manually, supplier management becomes more about keeping track of paperwork, rather than building value with your suppliers.
Governance is an area of growing importance and even competitive advantage. When an organisation effectively manages processes, measures performance and disseminates information internally, it will help ensure that everyone is moving in the same direction. With things done manually, it is impractical to expect real time reporting and complete organisation oversight.
These 3 challenges can now be solved in with eProcurement systems, creating a far more effective, and yet affordable, system.
eProcurement is more affordable than ever
Early eProcurement Software was built for large MNCs to manage their supply chains. However, new technology, including Cloud, has allowed a new breed of software to be developed for SMEs.
TenderBoard is leading the charge for affordable (yet packed with features) eProcuremet Systems that leverages the latest technologies to help SMEs digitise and automate their procurement functions. These new solutions are not about adopting technology for the sake of technology, but to achieve real benefits to your organisation. These benefits come in the form of cost savings/avoidance from productivity gains (our customers have reported a 30-40% improvement in productivity) as well as better interactions and exposure to suppliers.
The Age of Network and Platforms
With more and more companies going online and relying on the internet for their businesses, there is increasing familiarity with networks and platforms, which makes it easier to find and work with suppliers online. Such networks and platforms will not only help to increase the efficiencies of B2B interactions, but also typically come with features that help its participants manage their business. TenderBoard’s eProcurement System and B2B Marketplace is an example of this (sometimes called SaaS enabled Marketplaces). It is common for businesses today to perform all their interactions and transactions with customers and suppliers digitally.
It is natural today to assume that most companies have an email address and rely on the internet to conduct some of their business. This trend will only accelerate as networks and platforms become more mature and increasing numbers of companies become digital-native or cloud-native.
If you are still running your procurement with manual processes, grappling with the tonne of paperwork it generates, and are looking for a way to digitise and automate your workflows, here are some considerations before going Digital.
Considerations for going Digital
When moving procurement functions online, many companies start by thinking about how they can digitise their paper forms, workflow processes and reports. This is a good starting point, but it would be a missed opportunity leverage the latest technologies, to also consider how you could streamline your existing forms and processes.
With today’s technology, you are also able to leapfrog a previous generation of eProcurement Software to get far more capability then just digitising your forms, flows and reports. Modern cloud-native eProcurement System should be able to deliver:
While simple digitisation of forms and reports helps with productivity, systems also need to help you automate your processes for maximum efficiency. Much of the grunt work that procurement executives do to manually track processes today can be replaced with automated workflows, giving them back their time to focus on the value added tasks. These tasks include:
- Compiling the required information for payment requisition
- Sourcing for and obtaining quotations from suppliers
- Tracking sourcing activities
- Compiling clarifications and negotiations
- Obtaining approvals
- Performing goods receipt, invoicing and 3-way matches for payment reconciliation
All of these are critical processes that can be automated with an advanced eProcurement System like TenderBoard.
Flexibility and Future-Proof
The business world changes rapidly and your company will feel the pressure to evolve as well. As a business, you’ll need a system that isn’t only reliable but can evolve with you. Previous generations of eProcurement Systems (and enterprise systems in general) were clunky, delivered on-premise (as opposed to hosted in the Cloud), and not built to be updated often, much less in real time. These systems tend to be updated only when necessary (eg to patch security deficiencies or paid-for enhancement), and even so it typically takes days or weeks to arrange for the update to be applied.
TenderBoard’s system is built from the ground up to be fully flexible, configurable and rapidly deployed. Further, the system is constantly enhanced with new features and the latest technology to ensure that the best tools are at your company’s disposal.
Ease of Adoption
When migrating onto an eProcurement System to improve your processes, it needs to be a system that not only your staff can get behind, but also a system that your suppliers willingly take up. Utilising an eProcurement System that your suppliers have problems working with (eg suppliers must pay to quote, or if they find it difficult to use), you could end up in a situation where suppliers continue to work with your team manually, who then has to pick up the slack to perform transactions on the system on behalf of the suppliers. Choosing a system that both your team and suppliers find easy to adopt will facilitate your partnerships and transactions.