There is no doubt that technology has streamlined the labor intensive and manual activities to make them more efficient and responsive. The same can be applied to procurement processes, as eProcurement solutions provide us with a web based infrastructure of the supply chain and purchasing activities and systems. But to analyze the merits of eProcurement solutions, we can take an example of comparing both the traditional and cloud software. Let’s say that a sales representative needs $1,000 to purchase office supplies for a presentation.
In the Traditional Procurement DaysIn a traditional and manual procurement environment, the purchase process would generally involve:
Product selection – The representative has to search various vendor catalogs, and may not know whether they offer discounts or not. He/she may even have to be on-field with no accessibility to company’s catalogs.
Checking availability and prices – The sales representative will have to make numerous calls and negotiations to confirm the availability, quantity, and price of products.
Creating and approving requisition – For the purchase to effectively take place, the sales representative has to create a paper requisition with the correct details of item numbers and their prices. This process can take from 3 days to even more, depending on when the papers get approved.
Generating and approving purchase order – Upon the approval of the requisition, the purchasing department will allocate the requisition to various purchase orders. This is because the requested materials are supplied from multiple vendors.
Sending purchase orders to vendors – Purchase orders are faxed or mailed to vendors.
Vendor confirmation – upon receiving the purchase orders, the vendor will confirm the receipt and will deliver the materials within three working days.
Generally, the delivery timeframe goes from 5 to 7 working days when you initially fill out the requisition. When the company realizes the timeframe will not be suitable, they decide to buy office supplies from a local superstore. Though the representative can now buy the supplies with no delays and effort, the cost of the retail prices will be much higher than initially anticipated. These were just the on-face problems faced with traditional procurement systems. Now let’s take a look at how the same process is carried out with eProcurement.
E-enabled ProcessesWe all know how important procurement software solutions are when it comes to streamlining processes and reducing transaction time. However, we fail to realize that this automation has considerably reduced our efforts and implemented best practices. Buyers today can look at several online catalogs from different suppliers and can compare them easily. Real time communication has allowed buyers to confirm the availability and quantity, which makes the purchase order activity instant.
With greater standardization, buyers can access catalogs like never before, allowing greater accessibility. This accounts for a wide range of products and services that are available for businesses. eProcurement solutions allow us to manage international finance, shipping regulations, and taxes with global operability. The relative ease in configuration allows us greater scalability to grow with the buyers and sellers. Hence, for a business to grow exponentially in today’s market, eProcurement can give you the first step towards productiveness.
