In a business environment, procurement refers to the sourcing of supplies and services through strategic selection and negotiation. Traditionally, the process of procurement happened through conversations and paperwork between vendors and purchase executives. An e-procurement software solution brings about structure & transparency. To overcome challenges faced by having most of the procurement communication happen over eMail & telephone.
Digital revolution has paved the way for Electronic Procurement Solutions also called e-procurement solutions, that make purchase and sale of business supplies possible using information systems. e-procurement solutions overcome the limitations faced by eMail – some of which are:
- Unstructured communication
- No deadline tracking
- Person dependency
- No analytics
- Work eMail mistakenly treated as spam
These are some of the challenges related to communication. But here, I would like to talk about more fundamental challenges faced by organizations not utilizing e-procurement solutions.
The purchase department is a bastion of power
All organizations – large, small, public or government – have one thing in common, the purchase or procurement department. Their job is to procure materials and supplies for the organization – with three primary parameters in mind:
- Best price (for the quality)
- Sustainability of the vendor
- On-time deliveries
To do this, executives and managers at the purchase department are continuously evaluating vendors and their supplies for quality, services, and price. Effective procurement has a direct impact on the company’s bottom line. They also handle all the paperwork, accounting and compliance related matters to ensure seamless workflow of supply and production.
In the absence of consistent procurement, production will suffer. This cascades to failure to meet delivery commitments. With this great responsibility, the team also controls great power in the organization. We frequently observe that management rarely challenges the procurement department, and puts complete faith in them.
An e-procurement software solution provides the tools to introduce system-driven processes, shifting from people-dependent processes.
Procurement & the bottom line impact
A rule-of-thumb measure of purchase spend defines it as 50% of operational costs. Each point saved here has a direct bottom line impact.Mathematically, a 5% savings in this area brings down overheads by 20% and has the potential to increase net profits by 50%.
In other words, if a company with an annual turnover of 1,000 Cr is currently spending 400 Cr on its purchases, then a 1% saving on the same would save 4 crores. This simple illustration demonstrates that in organizations, when the sourcing of materials for production is automated, then it can directly impact the total expenditure on the process.
Money thus saved can be used in many productive ways including passing on the advantage to customers.
Benefits of Adopting e-Procurement Solutions
- An efficient e-procurement solution is deployed as an information technology to link suppliers, customers and value chain partners.
- e-Procurement solutions ensure all of the said parties are connected in a transparent, and documented communication loop.
- Vendors are able to bid directly on a common platform, and the buyers no longer have to follow up for quotations.
- The unified interface of these solutions contains product catalogs and order management at the same place, thus simplifying the procurement process and reduces operational costs of the business.
Discus Procure to Pay solution
The Discus e-Procurement Software platform gives your company full visibility of the key steps in your procurement process. P2P is a mature, auditor-approved solution for organisations that want to deploy a system-dependent process for their purchase team. Key features include:
- Purchase Requisitions, or Indents
- Request for Proposals (RFQs) that are sent to the minimum specified number of vendors
- Buyer-controlled template management – with on-screen calculations
- Bids from the vendor, tracking each version as it is submitted
- Bid comparison & item-level selection of vendors
- Smart approval matrix
- ERP integration
- Paperless submission of vendor documentation
- Electronic approval matrix for payments
- 100% transparency for long-term win-win relationships with vendors
Procure 2 Pay is a cloud-based e-procurement software solution that, by design, introduces efficiencies, transparency & structure to your organisation’s sourcing processes – making them system-dependent & auditable. Buyers using the solution laud its flexibility & usability. Auditors have independently validated the solution, and recommend it to organisations that want a systematic E-Procurement process.P2P has also won the most usable system award from software suggest – a thought that is echoed by the thousands of vendors who are part of our platform already.
There are many solutions available for automating your procurement process. However, few are truly cloud-friendly, and nearly no other solution has the user experience & configuration options that are available as part of P2P. Some of these are defined below.P2P allows users to define the RFQ format using Microsoft Excel upload-able templates.
These templates are then converted to web forms. Vendors, when filling out these forms, also can visibly check the calculated totals – exactly as the Buyer will see them!
Logistics procurement – Logistics & transport costs are a moving target. Transportation is a commodity, and each consignment has many parameters that determine the cost of the delivery. Date of travel, type of vessel, time of the year, etc all determine the rate provided by each shipper. P2P uniquely provides a pre-configured structure to procure logistics.
P2P uses the Discus smart workflow engine. This enables tiered approval workflows, where in you can configure the parameters (size of purchase, item type, plant, etc) that will trigger each workflow.
The “to pay” part of the solution digitises your payment approval workflows. This module provides an easy-to-use & automated document recognition engine that can be plugged in to your ERP, and payments are authorised only after the appropriate audience have approved.
CFR 21 Part 11 – P2P is designed to comply with CFR guidelines. This means that any organisation following GAMP5 guidelines can use the solution.
Powerful sourcing features – Rate contracts, service purchase, grouping buyers, multiple sites, item-linked vendor grouping, and much more – P2P offers all the features that are required for you to run your sourcing operations effectively.
Procure 2 Pay also comes equipped with a mobile app for Android and Apple devices.
Cloud delivery – P2P is one of the only true, full-featured, ERP-agnostic, Cloud-enabled solutions on offer today.