Implementation of an E-Procurement solution helps to eliminate the issues related to the manual execution of procurement activities and brings the waste of time to the minimum by streamlining the procurement process and controlling its effectiveness.
Until recently, procurement automation solutions were available only to large enterprises, because their cost was unaffordable for SMBs.
But today cloud solutions make such technologies available for SMBs as well. Now it is not necessary to buy expensive equipment or spend money on support.
This article elaborates on how the digitization of procurement activities enables companies to achieve greater efficiency in procurement and get rid of manual workflow errors.
Conducting manual purchases
The more paper forms (e.g. reports on the paper sheets) and some rudimentary solutions (e.g., manual maintenance of supplier database in Excel files) are used in the procurement activities, the higher the chance of missing something or not meeting deadlines. Transparency in such cases is out of the scope – it may take several days to prepare one report on the procurement performance – because all the information will have to be collected manually from different sources.
In some companies, approving purchase orders is a multi-step process with dozens of approvers without regard to what is being purchased: complex equipment that is worth millions or an office chair. This greatly increases delivery timeframes, but the management may consider such a structure to achieve “greater protection” against fraud and to ensure appropriate budget spent. In practice, such an approach does not work: employees just coordinate the process formally, without going deep into details, hoping that if someone has coordinated this requisition before them, everything will be fine. The situation is exacerbated by the large number of approvals.
Automatic prolongation of the contract
If a supplier has been reliably fulfilling all obligations within the contracts for a long time, buyers have no motivation to look for alternatives. Practice shows that it leads to lost profits. A more effective strategy is to periodically search for alternatives and hold sourcing events in order to create competition between suppliers, at the end of which you choose a permanent supplier for the next period, for example, for six months. And then you hold the sourcing event again.
Handling a huge supplier database
Competition between suppliers allows you to get the best terms for the transaction. But if you have an overabundance of suppliers, your employees will have to spend too much time evaluating all the proposals.
Lack of control over contract execution
When the number of suppliers increases from one year to another, it becomes difficult to ensure compliance. Manual workflow increases the risk of missing important events, resulting in delivery delays and other problems that can even lead to disruptions along the supply chain.
Until recently, E-Procurement solutions were available only to large enterprises because their cost was starting at dozens of thousands of dollars. But Acquirell makes procurement automation affordable for small and medium businesses.
1. With the help of well-configured approval routes, Acquirell will help the managers to find the “golden mean” between security and unnecessary bureaucracy.
2. In Acquirell each company gets its own profile, where the company can conduct sourcing events with suppliers while keeping these communications confidential. With the help of the solution, companies can streamline sourcing with minimal labor costs. Running sourcing events becomes easy even for a small department, or even for one buyer.
3. The solution allows you to manage relationships with suppliers: run accreditations, select important and reliable partners, and give feedback. It is also possible to divide suppliers into groups according to the importance for the company of what they supply and their reliability, and to build a different work algorithm with different groups: to establish close strategic cooperation with someone for years, invite someone to participate in sourcing events (e.g. RFPs), and refer someone to alternative and reserve suppliers.
5. The solution can be integrated with other IT tools and platforms, including QuickBooks.
6. Management has the ability to analyze all key metrics: the speed of order fulfillment, cost analysis by item, etc. Also, it is possible to track how much the company saves on purchases by conducting sourcing events.
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