Procurement is a complicated process that entails endless discussions, negotiations, paperwork, and follow-ups among others, making it a time-consuming procedure that may be fraught with human errors and inefficiencies. No wonder, increasingly, most companies, irrespective of size and scope, are turning to technology that simplifies and streamlines the process, resulting in cost benefits and improved efficiency.

Why did you consider e-procurement in the first place? If your company is experiencing one or many of the below-mentioned problems, you must take heed!

Major issues in procurement

• Shortage of supplies: This is one of the critical issues in procurement. Moreover, concerns over quality, fraud, compliance, and delivery keep the procurement manager on his toes, constantly on the look-out for high-quality vendors for the organisation. Scouting and selecting the correct supplier and maintaining track of their performance is a tedious and complicated process with several factors like product quality, consistent supply, best pricing, and lead time.
• Ordering errors: Human error is a regular blunder in any purchase department of an organisation that can mount to big problems if the suppliers are not cooperative. Filling out the order incorrectly, misunderstanding the request, ordering the wrong product or specs, making a pricing error, and so on are all typical blunders one sees in routine.
• Uncontrolled spending: Uncontrolled spending can be very costly for businesses in the long run. Unauthorized usage of resources is a common problem where employees abuse their positions for personal gain. This problem is linked not only to the use of capital without justification, but also to purchasing from preferred vendors at a higher price than other suppliers.

Benefits of Digitalisation of procurement

• Improving Purchase Efficiency Companies that embrace digital procurement are responsive to lower stock levels, quicker with re-orders, and save precious time on order processing, supplementary paperwork, and supplier interactions. As per a report by McKinsey & Company, most organisations invest 3 to 4% of their budget on transaction expenses and process inefficiencies. Automation and digitalisation have a direct correlation to improved efficiency, speedier operations, and fewer errors. Besides, procurement teams can focus on core strategic duties instead of routine and mundane jobs.
• Standardization: e-procurement tools bring in an important element of standardisation where supplier-related risks such as fraud, compliance, price variations, and other difficulties are mitigated easily. Their processes and procedures are meticulous, with well-defined workflows. Moreover, freak purchases, which generally occur when an instruction for purchase is given outside of the company's defined channels, can be controlled and eliminated.
• Transparent Dealings – The digitalisation of procurement provides all major stakeholders with clarity and complete knowledge of dealings. Structuring all the important data and making it available for both parties to see, it removes layers of ambiguity, distrust, or error. This is a welcome breather from conventional procurement processes, as it makes each transaction more visible and traceable. It is the simplest method to discover new savings possibilities, enforce contract compliance, and guarantee that the organisation is paying the lowest attainable price for its procurement.
• Cost-cutting: Increased efficiency has a natural impact on the company's bottom line. A transparent and more visible procurement process through digitalisation, companies can end up saving precious amounts on routine procurements and re-orders and also look at interesting options for resource innovation. Analytics and dashboards make procurement smarter by allowing you to see trends that might lead to better spending.

The numbers sum it all up

According to a McKinsey and Company report, procurement departments that apply digitalization estimate a 40% rise in yearly savings, 30 to 50% less time spent on transactional sourcing, and a 50% decrease in value leakage. However, automating a critical operation like procurement needs careful preparation. It must be launched and implemented in stages, necessitating a culture transformation that begins with upper management's involvement, which drives the change downward. The success of e-procurement is dependent on a proactive group of procurement professionals that have been educated and equipped to get the most out of digitalization and data insights so that they can work efficiently toward the organization's goals.

Net Benefit’s Procure Pro makes packaging procurement a piece of cake through cutting edge innovation and digitalisation, ensuring value from sourcing to purchasing, re-ordering to replenishing!