Many organizations have implemented software automation tools that allow them to get more done at a lower cost, but procurement is one area that has lagged behind in this trend.
According to Amazon’s 2024 State of Procurement report, 95% of decision makers believe that procurement has room for optimization. The leading activities procurement teams want to spend less time and energy on include:
- Costs and budgets (38%)
- Long periods of research gathering data for reporting (37%)
- Attempting to reach suppliers for information or updates; sourcing suppliers for simple purchase (37%)
- Performing work that could be automated (37%)
- Working across systems or tools that could be integrated (37%)
To resolve these pain points, many procurement teams plan to invest in technology or tools to be more efficient and integrate with other parts of the organization. In fact, 98% have plans for investments or upgrades in analytics and insights tools, automation, and AI-driven optimization of purchasing decisions.
Today, procurement tools are too useful and readily available to ignore. This guide explores the ability of these solutions to improve business efficiency and reduce operational costs, surveys the many types of tools on the market, their benefits, and essential features.
What are procurement tools?
Procurement solutions encompass a wide range of specific functions due to the many aspects of the procurement process, including purchase requests centralization, procure-to-pay, sourcing, budget management, supplier management, and forecasting.
A single solution can and should perform as many of these steps as possible, although this goal is typically difficult to achieve. (For this reason, a solution that can seamlessly integrate with additional existing tools or systems is necessary.)
How are procurement solutions classified?
Procurement solutions are classified into two categories: pure platforms and tools.
Pure platforms only handle procurement processes and are primarily used by large companies with a dedicated purchasing team that manages complex processes. Procurement tools deal with specific procurement processes and may also have uses in other areas.
It’s important to determine which category your business falls into when selecting a procurement solution. If your company has a team that handles highly complex procurement challenges, you’ll probably want a platform with many features and powerful capabilities. If not, you’ll probably be better served by a tool that specializes in one particular area of your procurement.
What are e-procurement tools?
E-procurement software automates an organization’s entire procurement cycle and integrates it into other systems. This process grants transparency and visibility into purchase orders and approvals to a sometimes surprising degree. The features of these solutions can vary widely.
Businesses, therefore, should select the product that best aligns with their procurement requirements and business strategy. E-procurement tools perform all their transactions digitally, but they also align with integrated applications and systems.
These tools are classified according to the procurement functions they perform, including contract management, informing, ordering, sourcing, and tendering.
Benefits of procurement tools
Procurement directly impacts a company’s profitability, so it’s often viewed as a strategic function. When properly equipped with the right platforms, procurement teams can achieve benefits such as increased efficiency and productivity, cost savings, better supplier management, and improved process visibility and transparency.
Increased efficiency and productivity
Manual procurement processes consist of many repetitive and redundant steps which reduce their efficiency. They require employees to spend time on low-value tasks instead of developing long-term strategies and solving larger issues. Automating repetitive tasks thus assists organizations in optimizing procurement performance.
Cost savings
For successful businesses to remain successful, they must remain competitive. This requires continuous process improvement. Procurement tools help organizations reach this goal by streamlining their spending, thus cutting operating expenses. The automation of workflows also helps maximize the use of humans and other existing resources.
Better supplier management
Procurement has historically consisted of a simple cycle of sourcing, buying, and paying for products and services.
However, it has since evolved into a more complex function of business strategy that considers vendor selection, onboarding, and relationship maintenance. Sourcing tools can help organizations choose vendors that deliver greater long-term value.
Improved visibility and transparency
Procurement consists of many discrete tasks, resulting in multiple sources of information. Accessing data from disparate data sources increases the complexity of these functions and the probability of data gathering and validation phases introducing errors into the procurement cycle.
Automating these processes is a great way to centralize data storage, as well, thus increasing procurement cycle visibility and transparency. As a result, stakeholders can attain a greater awareness of the status of pending tasks.
Automation also helps standardize routine procurement processes like purchase order approval, purchase requisition, sourcing, and vendor onboarding. This benefit makes compliance management more efficient and transparent.
Types of procurement tools
Some of the best-known procurement tools are sourcing solutions and enterprise resource planning (ERP) platforms currently used globally by many organizations.
E-procurement software
E-procurement software streamlines the end-to-end procure-to-pay process by centralizing every step of sourcing, buying, and paying in a single digital platform.
The software then makes supplier offers available for comparison, reducing purchase risks. E-procurement software also supports the specification phase of procurement. An added benefit of this type of software is a no-code visual user interface, which simplifies managing and customizing workflows eliminating the need for any technical or coding knowledge.
Spend management tools
Spend management pertains to the collection and distribution of purchasing information, often from external parties. It also involves publishing up-to-date purchasing information in order to make it accessible to clients and suppliers. Spend management is often carried out by separate tools, as this process is not always directly associated with procurement.
Contract management tools
Contract management solutions perform activities related to supplier contracts. These include the management of auditing and control activities, contract variations and settlements, payments, performance securities, and receivables.
Supplier management tools
Supplier management tools send Requests for Information (RFIs) and Requests for Proposals (RFPs) to suppliers selected in the sourcing process and receive responses to these queries. Supplier management often occurs over the internet, where it’s known as e-tendering.
These procurement tools also compare and analyze tenders received by the organization, which then negotiates and closes tenders. Furthermore, e-tendering supports the selection phase of RFIs and RFPs.
What to look for in procurement software
The large number of procurement solutions available means that it is crucial for businesses to compare the right criteria. They should perform detailed analyses of their requirements; it’s not unusual for organizations to re-think their needs after such investigations and choose an altogether different tool than those they’d originally expressed interest in.
The wide range of procurement tool pricing also creates a strong incentive to find a solution that provides the required capabilities with as few unnecessary features as possible. What follows are a few of the most commonly considered features in procurement software.
Self-service requester or supplier portals
How many hours a day or week do you spend routing people — requesters, suppliers, or even your own team — to a form, policy, or request workflow? Do you and your time constantly find yourselves looking for a way to impart this information without spending your own valuable time routing?
Portals securely centralize and organize all of your team’s forms in one place so that employees, requesters, and suppliers can access what they need, when they need it, without a wait or phone call for help. They help eliminate the resulting delayed response times and lack of visibility.
Role-based permissions give teams the ability to share portals with the right departments and customers (both internal and external), limiting access to sensitive information, and, in turn, lowering security risks.
Contract management
Contract management software simplifies the creation, negotiation, and signing of report contracts. It eliminates many of the manual steps contract workflow traditionally requires, most notably the need for multiple tools. Contract management software allows users to control contracts from end to end in a single platform.
When reviewing tools, look for one that easily adapts to your team and process needs — not the other way around. Any potential tool should not only be easy to understand from a visual perspective, but also easy to use. It should make building, maintaining, and adapting workflows streamlined and intuitive to best manage ad hoc purchases, regardless of coding knowledge or experience.
The ideal platform should also “play nice” with any existing applications, systems, and tools your business requires for its day-to-day operations. Tech stacks are complex, and no procurement tool can replace every app or software system your organization uses. Instead, imagine connect the many parts of your procurement operation to reduce the constant switching back and forth between apps.
No-code automation
Automation is the most important benefit of procurement tools, since it takes the most tedious work off the shoulders of employees. Solutions that lack this capability probably aren’t worth considering, especially if they can’t handle automated workflows for purchase orders, approvals and performance tracking.
In a recent survey of business leaders, 50% reported productivity as a key consideration when they decide to adopt no-code tools. When asked what the primary drivers for adopting process automation software are, almost 75% said increasing efficiency. Productivity, error reduction, cost savings, and freeing employees of time-consuming repetitive tasks were also among the drivers reported.
Notification features and assignments
Procurement solutions should document and track data such as contract terms, delivery notes, supplier information, and payment data. These features are particularly important in industries that require regulatory compliance. In these cases, businesses are required to send alerts and other notifications to appropriate authorities for possible corrective action.
To make procurement functions more easily auditable, look for a solution that offers automated notification features, records user activity, and enforces accountability by automatically assigning designated owners to tasks, approvals, and reviews.
Supplier management
Supplier management involves ensuring that an organization only does business with approved vendors that consistently perform well. This functionality also includes onboarding those suppliers and implementing self-service workflows, so that suppliers can be onboarded fast and provide value even faster.
With access to supplier performance data, teams can increase the spending power of businesses by using procurement data to negotiate with vendors more effectively, including the early settlement of accounts.
Reporting
After an organization has paid a vendor, it must then report the data to various stakeholders. These reports show how much a company spends on each supplier, allowing leaders to optimize costs where needed.
Most procurement tools are considerably better at reporting than a spreadsheet. The tools to consider should minimize the need to manually manipulate data by keeping it available at all times.
It’s important for procurement reporting tools to provide the ability to compare purchases during different time periods, generally for the purposes of identifying spikes or drops in spending between different years or quarters.
Real-time oversight is also an important feature, as executives need to understand how much teams spend (and why) in order to develop project budgets.
Seamless integration with business systems
Many businesses currently use software to perform many functions like accounting. A procurement platform should be able to directly communicate with these solutions without the need to copy and paste text. Ensure that the tool you select easily connects to the essential components of your existing financial system and collaborative tech stack.
Easy deployment
Procurement solutions that take a long time to deploy have higher operating costs, so rapid deployment is a factor all organizations should consider when choosing tools. After all, fast implementation means faster time to value. The software you choose should also offer flexible security to ensure team members only have access to the data they need.
Ease of deployment is a critical feature for driving the solution’s return on investment (ROI). Modern tools can begin automating workflows for key business processes within minutes. No-code solutions are particularly easy to implement within a short period since they don’t require a high degree of technical expertise and typically feature a visual user interface with drag-and-drop functionality.
AI features
AI is not a trend; it’s the future of process management for teams seeking greater efficiency and faster data insights.
Generative AI gives users instant access to KPIs and other metrics and allows stakeholders to find information more easily and rapidly than ever. It can also help procurement teams become more strategic by gathering data analytics quickly so that teams can spot trends, uncover issues’ root causes, and detect anomalies faster than ever before.
7 best procurement tools
Procurement is such a broad concept that its implementation tends to look different for each company, so the right solution needs to align with its operational requirements, business model, and — if it’s relevant — the company’s industrial sector.
The following tools are among the most popular choices on the market for teams looking to tap into greater efficiency gains, quality control, and operational excellence.
1. Pipefy for Procurement
Pipefy offers a flexible, easy-to-use, and award-winning procurement solution that eliminates manual work and automates tasks. It centralizes all the procure-to-pay steps, improving efficiency throughout its various workflows — from purchasing to accounts payable and supplier management. This solution also expedites communication with stakeholders by integrating with existing tools and systems for greater control, visibility, and oversight.
In addition, Pipefy increases the efficiency of sourcing, cutting costs and saving time with real-time supplier performance reporting.
Additional features of this platform include the ability to customize and standardize workflows for greater compliance and more consistent and controlled results. With mandatory form fields and phase requirements, It also ensures each request proceeds only when it’s ready, thus simplifying sourcing and supplier onboarding.
Pipefy also offers Pipefy AI, the award-winning and first true no-code solution built to enhance process management, automation, and optimization. Amplify your efficiency gains and make faster, more data-driven decisions by revealing new insights into trends, root causes, and process performance.
2. Kissflow Procurement Cloud
Kissflow Procurement Cloud is a cloud-based platform that streamlines the procurement process for businesses of all sizes.
Kissflow Procurement Cloud is ideal for helping companies transitioning from manual procurement management tools or replacing disparate systems. This platform allows users to access information in real-time from any location. Keep in mind that its asset and contract management capabilities are still in early stages of development.
3. Coupa Procurement
Coupa is primarily a spend management platform that helps users gain greater control over expenditures in order to increase operational efficiency and reducing financial risks from third parties. It can analyze spending patterns, manage inventory and optimize procurement strategies, all of which provide greater value for the company.
The biggest advantages of Coupa include its comprehensive, reliable capabilities, making it particularly effective for providing oversight in the form of audit trails. It also improves collaboration between team members and is highly effective when making large purchases.
However, some users report that the platform could be easier to navigate, requiring more time to implement and onboard than other similar platforms. In addition, Capta’s customizations and third-party integrations are not intuitive.
4. Procurify
Procurify is a platform that specializes in purchasing and spend management for mid-sized companies. It allows these businesses to centralize activities like creating, tracking and reporting for expenses, purchase orders and requisitions. These features help organizations make informed decisions and track purchases in real time.
Procurify is user-friendly and ensures a smooth transition between users, making it particularly useful for budget tracking and inventory control.
The most significant problems reported by users include a) long information retrieval times due to excessive scrolling, and b) difficulty navigating this platform’s many features. The downtime of Procurify’s server is also longer than that of competing solutions.
5. Precoro
Precoro helps organizations customize purchase orders, track approvals, and assign payments to the correct budget. It’s most useful for businesses with complex procurement requirements.
The ability to create free forms is one of Precoro’s more distinct features, as it allows users to add new fields to pre-defined templates. This capability ensures that an organization captures all the information it needs during procurement, providing greater flexibility for making unusual purchases by keeping them consistent with standard practice.
6. SAP Ariba
SAP Ariba is a cloud-based procurement platform that tracks spending and manages supply chains from a single platform. It also connects buyers with suppliers and manages all other aspects of the procurement process, including sourcing and contract management.
Notable advantages of Ariba include its flexible approval workflows, improved visibility into procurement transactions, good cross-platform availability and easy integration with existing systems. Its drawbacks include a steep learning curve, lackluster data graphics, and sporadically glitchy new releases.
7. Promena
Promena assists companies with sourcing and managing suppliers, especially those that use requests for quotation (RFQs). This platform handles bids resulting from RFQs, which any procurement professional knows can be time consuming when performed manually.
Promena manages the entire procurement process through reporting, allowing managers to easily make purchases. It’s also a powerful tool for analyzing spending patterns, providing a high-functioning, forward-looking procurement solution.
Factors to consider when choosing procurement tools
Investing in a new procurement solution is a major financial and time commitment. The following factors are important to consider when making a decision.
Company size and structure
The size of your organization can profoundly affect the best procurement solution for you, especially the number of potential users you have. In particular, consider the number of users who will carry out simple order requisition, or even view reports, as opposed to approvers and buyers.
Some procurement providers price their services according to the number and types of permissions required, so it’s important to get an accurate count of users and the access levels they’ll need.
Procurement process and needs
Some procurement solutions do one thing very well, while others are more versatile without specializing in any particular aspect of procurement. This issue can affect an organization’s choice, depending upon its maturity level.
For example, a startup may seek a solution with a modular structure that allows it to add new capabilities as the organization matures. Businesses that need solutions to specific issues like Supplier Relationship Management (SRM) or Contract Lifecycle Management (CLM), however, might choose a solution that focuses directly on those tasks.
Another important consideration is flexibility. A scalable solution is ideal, as growth and change are inevitable. Organizations should find tools that build and manage workflows easily, but also give them the ability to quickly and easily pivot with market changes.
Budget and cost
A solution’s cost is among the top factors businesses consider when choosing a procurement tool. Note that pricing models wildly vary among the available options, which can create a real challenge for making direct price comparisons.
For example, a software-as-a-service (SaaS) solution provider may charge a flat monthly or annual fee for an unlimited number of users, but that price is, paradoxically, sometimes based on the number of users. In some cases, providers employ a hybrid pricing model or charge a fee per module.
When considering and/or negotiating cost is, it’s critical to include the cost of deployment and time to value. This means that, in addition to upfront software costs, consider how long it will take to deploy, how easy it is to adopt, and how fast teams can begin using and generating value from the software or solution.
User friendliness, ease of integration, and implementation
Ensure that any software you buy is easy to use. A user-friendly procurement solution should also play well with your existing tech stack, especially accounting and ERP systems like NetSuite and QuickBooks Online. These platforms may have preferred vendors for procurement solutions, which you may want to consider before other solutions.
In addition, look at a solution’s ease of integration, especially if you already have a well-established procurement process.
Do more with Pipefy
Many organizations are adopting automation technologies that are redefining their procurement processes. Modern solutions emphasize a focus on user and supplier experiences and are focused on demystifying the complex workflows and tech stack management that usually comes with managing end-to-end procurement processes.
Pipefy’s AI-enhanced procurement software takes the guesswork out of managing and automating processes, all the while increasing buying power and providing greater visibility with access into valuable insights that can be drawn in seconds.
