Everything You Need to Know About Procurement Solutions

In its long history, procurement has evolved from self-contained purchasing entities to essential business partner handling processes involving several departments and many subprocesses.

Because of this, carrying out its operations manually is time-consuming and incredibly expensive for businesses. Savvy leaders are quickly adopting e-procurement solutions to lower the time, costs, silos, and strained supplier relationships that plague manual operations.

The risks of errors and bottlenecks alone in manual work make procurement a superb place to begin a digital transformation. These solutions — sometimes referred to as e-procurement — relieve procurement professionals and other stakeholders of manual and repetitive tasks, which saves time, cuts costs, decreases errors, and increases revenue for their businesses.

Below we’ll cover digital procurement solutions, essential features, and their benefits for optimized digital procurement workflows.

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Procurement automation opportunities

Purchase requisitions

An employee sees a need, creates a purchase requisition to obtain those goods or services, and circulates that requisition through multiple levels of personnel for approval. Carrying out this process manually makes it susceptible to bottlenecks — (one out-of-office manager can delay the order by days — and introduces costly errors and risks.

E-procurement tools benefit all stakeholders; the relevant departments for each purchase requisition see the same data on the same platform, establishing accountability at every phase. With automated response time limits, every stakeholder will receive an alert when an action is overdue.

Purchase approvals

The process of approving purchases and moving them to the stage of fulfillment presents similar issues to those of requisitions. By plugging your approval hierarchy data into a customizable workflow, however, your form can circulate while you move to your next task. Follow its path virtually by setting an email alert for each phase of approval.

Purchase orders

Automating the purchase order cycle can drastically reduce future invoice processing time and costs. From the requisition and approval phases to the issuance of the PO, it’s possible to digitize every step of the process. Here’s what that involves:

Find the right procurement tool for your organization. To say that you have lots of options would be an understatement. However, the software that works best for you will be based on your industry, business size, tech stack, and procurement objectives, which might include hastening production, eliminating order errors, or cutting dead stock costs.
Enter all relevant information and connect finance/accounts payable. Procurement and accounts payable intersect in several phases of the PO process. Therefore, as your new software system is implemented, it will be linked to accounts payable to ensure all records are reliable and payments are made.
Map process and approval workflows. Assign each and every team member to make detailed lists of the tasks they perform in the PO process, breaking them down into steps. Build out workflows accordingly. This is a crucial part of digital transformation because it defines the functionality a new software system will provide for you.
Automate. Now that your workflows have been defined and mapped, use your digital procurement software to bring them to life with automation, which are the key to producing faster, more accurate, and cost-effective POs.

Supplier relationship management

Tension is never pleasant, but only those procurement professionals pinpointing lacking supplier relationships can evaluate and rectify the situation. E-procurement tools build strong buyer/supplier relationships and restore strained ones by providing:

Faster payments and reduced late payments
Self-service workflows for suppliers
Fast and user-friendly vendor onboarding
Automated follow-up phone call reminders and status update notifications
Feedback surveys and questionnaires
Visibility into supplier performance

Invoice processing

Digital procurement tools can automate the invoice process at every phase, eliminating the need for document scanning or manual data entry. E-invoicing software extracts information (including payment statuses and histories) from both ingoing and outgoing invoices and integrates it into your existing data stack. It also provides visibility into your entire invoice workflow, from issuance to payment.

7 must-have e-procurement features

The prospect of implementing an e-procurement solution that comes up short of the functions you need is disheartening and frustrating. Make detailed lists of the procurement issues you need to address.

Survey all stakeholders for ideas, emphasizing the contributions of employees who will work with the system each day. As your list of must-haves grows, take the following fundamental digital procurement features into consideration.

1. Automation

Automation capabilities have revolutionized procurement. Many procurement processes require knowledgeable, experienced professionals at the helm. This is, ironically, why automation is critical. Repetitive, tedious tasks like order entry shackle employees and waste their expertise. Automating these tasks frees procurement teams to focus their working hours where they’re most needed.

2. End-to-end integrations

A new digital procurement tool may replace a few software systems in your tech stack. After all, it’s there to simplify and streamline. You may decide to continue using some external apps, however, so choose an e-procurement tool that integrates with your ride-or-die apps like Slack, DocuSign, and SalesForce.

Speaking of apps: have you ever wondered why your favorite apps don’t work together? Low-code business process automation (BPA) platforms allow you to build customized automations that serve as conduits between apps, adding to their functionality. This process game-changer is known as stack extensibility.

3. Document management

Digital contract management should be included in any e-procurement tool; it’s that important. The feature allows procurement teams to monitor and control a contract’s lifecycle, access previous versions, and keep documents up-to-date for everyone involved. Contract compliance and procurement work together in the following areas:

Customer relationships. Consistent compliance with all contract requirements builds relationships of trust with customers and suppliers. You are far more likely to secure new contracts and expand current ones by complying, and communicating early when issues arise.
Risk reduction. If your industry has volatile inclinations or there is a supply chain disruption, a digital contract management tool can monitor and forecast those changes so that you can mitigate possible disasters.
Life cycle management. Regulations and requirements can change over the duration of a contract. Digital contract management provides the instant visibility and access you need to make contract updates and revisions and circulate them to stakeholders.

4. Vendor screening and onboarding

Manually screening vendors involves painstaking research compiled precariously into spreadsheets. E-procurement eliminates both. Potential vendors are empowered to self-register and access their own information, allowing procurement teams to make data-informed decisions about partnering with them.

E-procurement tools eliminate the time-consuming data entry of vendor onboarding, as well. Create and/or evaluate an NDA, a set of terms and conditions, or a W-9, then circulate it to legal and accounts payable teams for approvals and secure cloud storage.

Grant and restrict document access levels on a person-to-person basis. Digital procurement systems are designed to remove the inevitable delays and miscommunications from this process.

5. Three-way matching

Three-way matching is the process of matching an invoice, purchase order, and order receipt to ensure accuracy before payment release, and it demands error-free review among many stakeholders. Collecting, processing, and passing along paper documents introduces risks of inaccuracies and misplacements.

E-procurement tools mitigate those risks by eliminating manual paper processing, accelerating reconciliation times, and eliminating costly errors like duplicate or late payments.

6. Automated alerts to approvers and other stakeholders

Digital procurement offers multiple ways to employ alerts, but one of the most useful is alerting stakeholders in a document’s approval circulation. This has the potential to save busy procurement professionals from hand-typing many emails each day and eliminates the possibility of a paper document becoming lost or misplaced along its approval journey.

Any person within a business can be added to any workflow phase, so all stakeholders know exactly where a document or project stands in real-time. The implications of this capability reach beyond procurement teams to streamlining procurement-related processes for other departments like accounts payable and quality control.

7. Structured and digital request forms

The ability to create structured forms to enter and store data is a procurement necessity. Most source documents in e-procurement solutions, including invoices, purchase orders, and receipts, begin as data entered into form fields. Structured forms organize the data and make it searchable. This is not only convenient for day-to-day operations, but for resolving compliance and audit questions, as well.

The ease and convenience of digital request forms have made them ubiquitous across many industries. They benefit both internal and external procurement operations by digitalizing the inter-departmental ticket process and offering suppliers and customers a quick, user-friendly method to onboard and submit requests. This functionality is a digital procurement must-have.

Benefits that procurement solutions should offer your business

Cost savings

Saving money is the most common reason for digital conversions. Businesses that convert watch savings pile up in just about every department, cutting costs on paper, record and inventory storage, postage, and the time and cost of repetitive tasks, just to name a few.

Risk management

The powerful customizations offered by digital procurement tools allow you to monitor and maintain compliance to contract standards. In the long term, the streamlined, agile business model you have built will position your business to survive and thrive during market disruptions like those of the past few years.

Empower and engage suppliers

A fast, hassle-free onboarding process is a great way to start a buyer/supplier relationship. Maintain that goodwill with easier and more frequent communication, on-time payments, and feedback surveys to learn about their experiences with your organization.

Faster approvals

This essential process seems tailor-made to be automated through the use of a procurement solution. Wave goodbye to delays and bottlenecks by sending a form on an automated path through various departments for approvals. Timed alerts keep everyone, no matter their position or department, apprised of the approval status.

5 best procurement solutions

Pipefy

Pipefy’s award-winning procure-to-pay solution helps procurement teams reduce costs, improve process efficiency, and better connect procurement strategies with business goals.

Easily transform your business’s procurement processes with features like low-code automations, dashboards for up-to-the-minute process performance reports, and customizable ready-to-use templates.

Kissflow

Kissflow Procurement Cloud is a low-code/no-code work platform that allows users to design custom apps and digitize processes with minimal coding. Features include automated workflows and forms, project and case boards, collaboration tools, analytics, and integrations.

Procurify

Procurify is a cloud-based procurement and purchasing software solution that helps users control, track, and manage their purchasing process. Features include customizable approvals, in-platform communication, audit tracking, analytics and reporting, and accounting and ERP integrations.

Coupa

Coupa is a business spend management platform that allows users to manage expenditures. Features include AP automation, expense tracking, approval workflows, and Slack integration.

ZIP

Zip is an intake-to-procure tool that offers a centralized platform for all stakeholders in the procurement process. Features include approval workflows, departmental and tech stack integrations, activity dashboards, and audit management.

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