Introducing Transparency, Efficiency and Speed in Procurement

An e-procurement solution facilitates, integrates and modernizes the entire or partial procurement process, from buyers to suppliers and the other way round.  From streamlined procurement, transparency and process efficiency to cost reduction, supplier discovery, paperless environment and real time monitoring, e-procurement solutions offer a wide range of benefits to an enterprise.

Collaborating directly with suppliers on the Internet was more of an option than an absolute necessity for companies as recently as a couple of years back. Today, however, it has become indispensable even for companies operating across smaller geographies to use electronic procurement solutions for cost-effective and efficient management of many procurement tasks involving varying complexities and risks.

As ‘procurement’ happens to be quite a broad term, most business entities adapt to e-procurement especially for different types of purchases in the beginning. When hassle-free cooperation between different suppliers is of paramount importance, a robust e-procurement solution is the perfect way out.

E-procurement solution experts recommend the implementation for non-critical systems in the first phase. The initial goal for any enterprise should be to create a paperless environment by deploying an electronic procurement solution. This can simplify purchases and orders, generally by standardizing the flow of communication and exchange of money or material between suppliers and buyers. Once the system is up and running, a company can improve its purchasing power by making use of reverse auctions, have new suppliers onboard and slowly aggregate buyers.

Trends

Increased Transparency: From a supplier’s prices to its composition of product lines, purchasing managers today are opting for e-procurement solutions that offer greater transparency.

E-Procurement is of Strategic Importance: An e-procurement system is now considered as a must-have component of an informed e-commerce strategy.

Cloud Solutions are Picking Up: Cloud delivery of procurement automation software is helping vendors reduce the total cost of acquisition for their clients. For accelerated ROI, better performance, ease of use and centralized e-infrastructure, many SMEs (especially those using such systems for the first time) are now opting for cloud based electronic procurement solutions. Organizations that have been using legacy solutions are also exploring SaaS-based models for e-procurement.

Mobility: As the smartphone revolution has picked up speed, IT companies in the e-procurement space have begun offering mobile-ready e-procurement solutions. Mobile interfaces and even custom applications are options enabling this trend.

Versatility is the Real Advantage: Designed and implemented well, e-procurement systems enable companies to connect its disparate elements as well as business processes straight with its biggest suppliers. The huge line of interactions that can be administered includes everything from the management of correspondence, questions and answers and bids to multiple emails delivered to various participants and previous pricing. In addition to that, a first-rate e-procurement system provides an organization with the latest, built-in supervising tools that are specially meant to control costs and guarantee optimum supplier performance. The system also makes it easier for managers to verify pricing and control all previous agreements in order to make sure that the new price quotes are more viable as compared to the last ones. In the long run, this proves to be highly effective in keeping an open line of communication with all potential suppliers.

Analytics: With the right implementations, CFOs can easily get analytical reports on how money is being spent, and how suppliers are faring on key parameters that are important for each business. This helps weed out suppliers whose performance or pricing leave much to be desired.

Market Demand

At the moment, the market demand for e-procurement solutions is a function of the geography. As vendors gain significant competitive advantage by grouping suppliers, they create a formidable barrier to entry for any new player in a local market. E-Procurement vendors may, however, tread past these barriers in coming years in order to exploit economies of scale.  

While e-catalog specialist vendors are receiving good response in emerging countries, industry specific e-procurement solutions too are picking up in many parts of the world.

In Western Europe and North America, e-procurement solutions are considered mainstream solutions with penetration rate as high as 30%, according to a report by Gartner on e-procurement market and vendor landscape. In regions such as Latin America, India and Eastern Europe, the demand for electronic procurement solutions is growing as several companies have recently deployed such systems. In China and Middle East, the trend is also picking up.

Not just private entities but public sector companies and governments too are keen on utilizing e-procurement solutions for maximum resource utilization, revenue consolidation and transparency.

Choosing the Right IT Partner

While the benefits of e-procurement solutions are numerous, finding a good IT partner remains vital. It is an IT partner that can help ensure better speed in terms of quick cloud delivery (if applicable), integration, backward system compatibility and complete program management.

Redesigning various procurement processes, integrating existing IT systems, harmonizing multiple organizational functions and skill development are a few tasks that demand IT expertise and hands-on experience.

NIIT Technologies, a leading provider of IT solutions and services has demonstrated expertise in the domain. Having the right IT partner for e-procurement solution deployment is therefore a fundamental requirement for successful adoption of a good procurement system.