Staying competitive in the today’s business world requires a laser focus and a willingness to adapt to anything that might improve efficiency, reduce errors, and cut down on costs. The recession, if anything, has succeeded in reinforcing this lesson once again. Spend management solutions and an increased need for automation, are fast gaining prevalence. A host of new and upcoming technologies and system are entering the market, raring to take over specific aspects of businesses. In the supply chain area, one such technology is that of e-procurement.
When it comes to purchasing departments in organizations, e-procurement is said to be the next big thing. Essentially software, e-procurement solutions aim to streamline the purchasing process for both the buyers and the suppliers. All steps of procurement from start to finish can be done through these software, eliminating the many delays and meetings that are likely to come between purchase orders at organizations.
Since the advent of e-procurement, a number of studies have been performed to evaluate the efficacy of these systems; all of them conclusively reinforce the positive impact on the procurement performance measures in most organizations. Here are some of the major operational measures in which the most improvement was observed.Reduce Errors
As we discussed before, with the business arena being as cutthroat as it is, organizations can no longer afford errors and must strive to keep their operations free of discrepancies. One misstep can often mean the difference between success and being thrown out on the streets. Imagine an error made by a purchasing officer resulting in the organization receiving an entirely different cargo arriving from the suppliers than the one actually required. Such mistakes are not an uncommon sight in organizations using the traditional manual purchasing and procurement systems.
The switch to e-procurement has enabled organizations to take human error out of the equation completely. In a process as intricate as procurement, it is often best to leave it to the machines.Prevent Maverick Buying
One of major issues that organizations face when it comes to sourcing and procurement is maverick buying. The phrase refers to unauthorized purchase of equipment and materials from those within the company who require it. While the purchases are justifiable, by buying outside the authorized channels, they often pay a premium price; this wouldn’t be the case if the established company-supplier channels were used.
By offering system controls that can be activated to prevent all unauthorized purchasing, e-procurement systems neutralize the issue maverick buying completely. This is also the primary reason studies have observed an increased trend in centralized purchasing after organizations make the shift to e-procurement.Gain the Power to Automate
Most e-procurement systems today grant companies the ability to automate buying and selling. This makes it possible for companies to ensure controlled inventories and reduce unpredictability, while also reducing purchasing overhead. Manufacturing cycles are refined, saving the organization considerable time, effort, and costs.
The benefits of e-procurement are undeniable, and the systems are expected to be integrated with the trend of computerized supply chain. Every business realizes the importance of supply chain, and to avoid falling behind, the new must be embraced. Get an e-procurement system for your organization if you haven’t already!
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