Procurement, as we all know, is a process of sourcing, deciding the terms, and acquiring goods or services from a third party/supplier. It has come a long way, from being just a purchase function to getting a seat at the top management table. Well begun is half done, they say, well indeed if you plan your procurement strategies correctly it will save the business time and money. E-procurement is a catch-all term that encompasses all the aspects of electronically assisted buying that enables the procurement professionals to make a purchase remotely, on the go. Electronic procurement eliminates all the roadblocks of a traditional procurement process, ensuring a smooth supply chain management. But several organizations even today haven’t realized the potential benefits it can reap as a result of an efficient procurement function and still continues to follow the traditional procurement processes. This is a classic example of how human civilization has moved on and adapted itself to the Internet age, but few are still stuck behind in the stone age.
Here we have listed three roadblocks that your organization is set to face if you are still stuck in the stone age, err if you still follow the traditional procurement processes.
Slow, Time Consuming and Repetitive – Traditional Procurement
In today’s fast-paced world who has the time to wait when everything is available at the click of a button or is just a message/call away? Traditional procurement processes are slow, time consuming and often repetitive in nature. There are various activities that entail traditional procurement such as seeking approval, proposal writing, bidding, and negotiation among others. But when an organization has adapted itself to e-procurement, it automatically eliminates lengthy and time-consuming processes and replaces them with quick and automated processes. As a result of implementing e-procurement, organizations can expect shorter lead times.
Traditional Procurement Weighs Heavy on the Budget
Traditional procurement practices require two things – resources and personnel. The older procurement processes were all paper-based, right from seeking approval to billing, it required more labor force to manage them. Thus making traditional procurement a relatively costly affair. From liaising only with long time partners to now seeking suppliers that fit the company’s overall objectives, procurement leaders have come a long way. E-procurement expedites the process by eliminating unnecessary and repetitive steps and enables real-time interaction with the suppliers. Electronic procurement helps in creating cost savings opportunities for the organization by eliminating unnecessary wastage and redundant activities.
Electronic Medium has more Control Compared to Traditional Procurement
Procurement is a part of the bigger picture called supply chain management. Procurement and sourcing involves numerous steps that are complex in nature and difficult to control. Why, you ask? Because there are way too many stakeholders present at different junctures with the scope for little or no communication with each other; thereby, blurring the lines of control and leading to chaos. However, e-procurement eliminates such shortcomings of the traditional procurement processes by restoring visibility, consolidating, and bringing back all the stakeholders – buyers and sellers – onto one platform. Electronic procurement facilitates access to information and streamlines processes across the supply chain.
Does your organization still follow the outdated procurement process? Are you having trouble in collecting procurement insights, supplier information, and adapting to e-procurement? Fret no more! At SpendEdge, we help clients by providing actionable insights on the best procurement practices and supply chain management to make well-informed strategic business decisions that’ll help ameliorate ROIs.