Does your procurement system consist of a piece of paper that’s passed around until it eventually ends up in a dusty folder? Or does your department keep track of everything in a spreadsheet system, that’s just as easily lost in electronic sub-folders—if you remember to save it at all? If you're using a legacy system, it is time to consider an e-Procurement system that will put you back in control of spending, and save your company time and money. What are the benefits of e-Procurement?
Here are the top eight benefits to move to an e-Procurement system.
e-Procurement gives you centralized access to all your data. Track down a PO or an invoice and analyze metadata to find areas where you can improve your processes. This could mean tracking areas where approvals take the longest and could be shortened, vendors you spend a lot of money with (and might be able to negotiate better terms), when to pay invoices to both take advantage of early pay discounts and optimize cash flow, on-contract vs. off-contract spend, and more. The sky’s the limit with what you can data mine.
e-Procurement systems allow greater flexibility and control over every aspect of the purchasing process. From controlling who can input an order, to who can approve and purchase it, to who can receive against or pay it, all the way down to who can see the details of that transaction after the fact (and in some cases, even which details)—control is central to the modern e-Procurement platform. If you want control over not just what you spend but who can spend it, who can authorize it, and who can see it, then a modern e-procurement system is what you need.
A common problem with legacy systems is human error. A human enters in the wrong numbers. A human mishandles a spreadsheet. A human goes on vacation and doesn’t approve a purchase order before they leave. Modern e-Procurement systems use automation to cure these common ailments. Instead of having a human enter in a PO or invoice by hand, you can use one of a myriad of options like templates, Punchout, or OCR (optical character recognition) to automate the data entry so your numbers match up every time and eliminate the guesswork. Need someone to approve a high-priority purchase? Instead of carrying a piece of paper from desk to desk, the system can email each approver in sequence and let them approve right from their inbox to move the purchase along. Your approver is out of office? Let OOO (out of office) delegate approvals automatically send the document to an alternate or the next approver in the chain to keep things flowing and keep your business moving.
Budgets are a reality for every organization, and a hallmark of a good e-procurement system. With a legacy system, budget calculations are all done by hand or in spreadsheets. There’s low visibility, no real way to enforce approvals for over-budget purchases, and one wrong keystroke can spell certain doom. Modern systems will automate all of this and let users know the available budget, even before they raise a request. Best-in-breed systems will not only alert approvers if a request is over budget, but trigger special routing rules or approval workflows for over budget expenses to ensure they’re properly accounted for. Modern systems also allow budgeting at both the GL Account and Project level, adding extra flexibility for your budgeting needs.
Easy vendor management
When you can view all of your orders for a vendor in one place, remarkable things start to happen—you can consolidate similar orders to take advantage of bulk discounts, you can show vendors how much you spend with them in order to negotiate discounts, and you can see when non-preferred vendors are being used and even put a stop to those orders to save money there, too. This kind of metadata isn’t available with a legacy system.
Reduced rogue spending
Rogue spending is a big issue for many companies. Around forty percent of employees admit to having gone rogue—buying an item without proper approvals, or buying a different item than what was approved—at some point. With paper and spreadsheets, it can be easy to hide or mask a rogue purchase. Not so with e-Procurement systems. In fact, having an electronic audit trail that never goes away is a powerful deterrent to rogue spending in and of itself, so not only is it easier to catch, but you’ll have fewer instances of it to begin with.
Rock-solid audit trail
For many organizations, the question of what was purchased is not as important as knowing who interacted with that purchase, from request through payment. Paper and spreadsheets can track some of this information for you, but what if someone changed what was on that paper halfway through the buying decision? The truth is, with older systems, there’s really no way to know. Modern e-Procurement systems, on the other hand, log every access to every document, and provide a detailed trail of exactly who did what. If the third approver added five extra widgets to your order, now you’ll know exactly when and where they did it, or better yet, be able to stop them from changing the order in the first place. Also, audits become a breeze, since there’s a detailed history of all changes to each request right there in plain sight for everyone to see, transforming what used to be a drawn-out chore into an easy exercise.
Switching to an e-Procurement system can not only save your business time, but most enterprise businesses save a million dollars each year through reduced fraudulent spending, taking advantage of early pay discounts, and reduced headcount. Some companies have saved the equivalent of 2 to 6 full-time positions just by putting Fraxion into place, by allowing their operations to scale, without having to add positions to their procurement department. And with our new Marketplace group purchasing platform, you can purchase supplies for 20-30% less than market price, without leaving your Fraxion platform.
An e-Procurement system can revolutionize your procurement process. By switching platforms, you’ll enjoy these eight (and many more) benefits, fewer headaches for your staff and more money in your budget.