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Online B2B Procurement – A Twilight for SMEs to Boost India Forward Online procurement helps bring down the total cost of procurement

By Kushang

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Every country has different a definition for their Small and Medium sized enterprises (SMEs), in India, SMEs are understood as enterprises where the investment in plant and machinery or equipment is between INR 25 lakhs to INR 10 crores in case of a manufacturing industry and between INR 10 lakh to INR 5 Crore in case of a service sector enterprise.

Contribution of SMEs

SMEs are considered to be one of the biggest contributors to the economy of a country, a report published by "The Ministry of Micro, Small and Medium Enterprises" has stated that India has seen a tremendous growth in this particular segment, not only creating countrywide employment but also helping in rapid urbanization of rural areas. Thanks to some of the recent efforts put by Indian government and businesses like Reliance Jio who have helped to educate the use of technology in day to day work life, spreading awareness in even the most rural places. Among all this limelight & bold moves, there are a few other practices which have helped these SMEs, among which the fascinating practice is the change in the procurement behavior of these businesses, which have helped these businesses grow at such a fast pace.

How Does Procurement Work

Let's first understand the basics of procurement. Business-to-Business Procurement by definition is the process of finding, agreeing to terms and acquiring goods, services or works form an external source. Generally involving large quantities and repetitive orders, some might find the process to be rather simplistic and very straightforward, but only the experienced know the real deal of getting their hands dirty into this multi-layered process involving tedious steps that might have even kept them awake for nights. Why? if you want to know, let's dive into a few of these layers to untie the Secrets of Success.

Process of Procurement

Contributing a major chunk of the overall business, a traditional offline procurement process starts with first the identification of the needs, be it temporary or permanent, followed by an extensive process of exploration of supplier options to finally arrive at finalization of the supplier by fixing price and all other terms including payment options, delivery time etc., typically forming these small little terms require utmost care as the traditional offline procurement hangs towards long-term business relationship for most cases. All these initial talks typically lead to the second phase of the procurement phase which involves generation of a purchase order, order delivery, receiving the invoice and finally recording of the whole process and archiving the data to future reference.

Offline vs Online Mode of Procurement

Now let's compare why there is such a drastic change in the final outcome of offline vs the online mode of procurement, which is almost convenient is every possible way, even including the first step of identification of one's need as you can directly see and compare an extensive list of virtually all the possible products or services made available by all the major suppliers across the country. Without much of a surprise, these small advancements take a major leap as you move down to the second phase of procurement which is almost completely automated with and equipped with features like automatic purchase order generation, live tracking, digital invoices signed via digital signatures, payment security and even an online clutter free archiving of the whole process, which you could summon via typing a simple search query.

Online procurement not only brings down the total cost of the procurement but helps SMEs to save a major chunk of their time, which they can and are utilizing to grow their business.


Co-Founder, ADURCUP

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