How Technology Has Empowered The E-procurement Solutions For Businesses
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Companies have been transformed by e-procurement. E-procurement has made it much easier for them to procure products from vendors. Before e-procurement was introduced, companies had to interact with vendors over the phone or in person. The entire process was cumbersome and it was not uncommon to have gaps between what buyers wanted and what vendors delivered. By removing many intermediate steps related to procurement, e-procurement has made the entire process seamless and transparent.
Advantages of E-procurement
A company that wants to use e-procurement can only do so after it registers vendors on its e-procurement portal. So creating an e-procurement portal is usually the first step before starting e-procurement.
Having an e-procurement portal can benefit both buyers and sellers as many vendors can be on-boarded on the portal with their products and a company may shortlist a handful before starting an auction. Usually, the vendor willing to sell at the lowest price closes the deal.
E-procurement makes the entire procurement process seamless. It is better in many ways than manual procurement in terms of transparency, efficiency and optimal utilization of resources. Transparency is a key feature around which other objectives revolves as it ensures that all the team members as well as the qualified suppliers have equal access to all system elements, including procurement methods, legislation, evaluation criteria, technical specifications, supplier rights, etc. The process empowers you with the ability to add more strategic value to your company.
Advances in technology means e-procurement is more nimble than ever before. Technologies such as artificial intelligence (AI) are playing a big role in the e-procurement process. It helps vendors to see intuitively which product the company wants just like search engines provide suggestions. A vendor of ceramic vessels may input the word ‘coffee’ in an e-procurement portal and see all items a buyer needs related to coffee. The products displayed by AI when the word coffee is input may include coffee makers, coffee, coffee cups, and everything related to coffee the buyer is looking for. When such information is visible to vendors at a glance it gives them instant clarity regarding the kinds of items a vendor needs.
Enterprise Resource Planning and Data Analytics
Usually, an enterprise with hundreds of employees and hundreds of crores of rupee in turnover needs to buy constantly from vendors. Many enterprises are visited by vendors on a daily basis but the process is tedious and tiresome without the presence of an e-procurement process. Having an e-procurement process helps in providing real-time budget management facility to companies and makes the procurement process simpler and transparent. It serves the function of an enterprise resource planning (ERP) software in addition to being a portal on which vendors can sell.
Data analytics is also becoming an integral part of e-procurement. When put to work, data analytics powered by cloud-based AI can make accurate predictions about which vendor is likely to offer a superior product. The predictive capability of data analytics allows businesses to manage costs and its relationships with vendors as well.
E-Procurement Smoothens Processes
E-procurement makes processes seamless by mapping all concerned departments to the procurement portal. This allows concerned departments to monitor procurements relevant to them and participate in the procurement processes when necessary. An organization has the freedom to decide which departments it wants to map and how much authority each one should have. For instance, a finance department will likely need a higher authority than any other department because it will play a central role in granting funds for all procurements made on the portal. Similarly, a procurement manager must be granted great authority on an e-procurement portal. Other departments may only be granted authority depending on their functionality.
Such seamlessness makes procurement easy and eliminates paperwork. Vendors enjoy using such portals because, using them, the procurement process requires little effort and is transparent throughout. The AI and data analytics features found on procurement processes allow vendors to learn what items are in demand and allow the companies that own portals to make accurate predictions about how much of a product they need and how reliable a vendor is likely to be. Because portals serve as ERP software, companies can track all inventory and make accurate procurement decisions; keeping just the right amount of inventory results in significant cost savings. Hence the benefits of undertaking e-procurement process are numerous and are growing every year. Emerging technologies such as blockchain are also likely to play a significant role in making e-procurement portals even more secure than they are today.