Learn how to raise your mid-sized business’s profit margins with a digital procurement strategy, led by expert procure to pay solution providers.
With advances in technology, managing procurement no longer has to be a burden on your company. The demand for process automation is evident, as 90% of employees feel encumbered by repetitive and tedious tasks that modern procurement software solutions can easily alleviate.
Top-rated procurement software solutions enable companies to streamline processes and spend control, while leaving inefficient, manual, and paper-driven systems behind.
Try searching for a system, and you will turn up a seemingly endless list of options for procurement tools and software. There is, however, no one-size-fits-all solution and deciding which procurement software solution best fits your company's specific needs requires planning and careful consideration.
We’ve compiled seven actionable steps to kick-start your procurement software search and guide you to selecting the right solution for your company.
- Conduct a needs analysis
- Outline your deployment model and goals
- Look for solutions with expertise in your industry
- Review customer feedback
- Build a solid business case
- Request software demos
- Make your choice
1. Conduct a needs analysis
Any time a department considers new solutions or opportunities for change, it's vital to understand what your company requires from these new tools and optimizations. In the case of procurement, a thorough needs analysis can help identify the gaps and risks in current processes and differentiate software ‘needs’ from ‘wants.’
Most procurement software solutions may appear to offer all the answers. Still, once deployed, they could mask critical issues that may be embedded deep in the business. It's essential to understand which systems and processes can be improved by software and which one’s demand changes to the broader policies, people, and procedures that are in place.
A simple but highly effective tip here is to compile a pros and cons list to better understand current challenges, where weaknesses exist, what is currently working and what your goals for improvement are going forward. Some of the scenarios you should consider are the categories of operational spend your company incurs, for example:
- If it’s travel, ensure that all scenarios, challenges, and examples of any policy breaches or overspend etcetera have been documented. Sourcing a solution that enables travel requests and pre-approval of spend will be a prerequisite.
Do your homework, shop around, and be sure to gather input from your key stakeholders and potential users, by doing this you can obtain clear and insightful answers to your company's most critical software needs.
Whether a lack of visibility, poor policy enforcement or slow, error-prone processes are driving the need for procurement software, it’s important to pin-point these key areas, so that selecting a solution that best meets these needs can be identified.
2. Outline your deployment model and goals
A host of procurement solutions are available today, albeit with little guidance on the specific features your company may need or the best deployment processes to follow. While the needs analysis in step one exposes any gaps or shortfalls in your procurement process, step two will help you identify your software deployment goals and options.
During your consideration phase, you need to decide whether a cloud or on-premise solution will suit your organization better. There are specific differences between cloud, and on-premise solutions, the key difference being where exactly the solution is installed and hosted, if it’s on-premise then it will be installed and hosted on your company’s server, if it’s cloud-based it’s hosted on public clouds, or hosted private clouds such as services offered by Microsoft Azure and Amazon Web Services (AWS).
In an on-premise environment, your data is retained and managed by your IT infrastructure. The costs of managing and maintaining a solution can run exponentially higher than cloud solutions, due to server hardware, expensive software licenses, power consumption, and the need for a skilled IT team.
Hosted cloud software removes the burden on your IT team by eliminating the need to maintain and update systems, freeing up time, money, and resources to fulfill core business strategies. If you have a remote team, a hybrid operating model, or dispersed office locations, some cloud solutions offer the mobility, flexibility, and collaboration tools to seamlessly connect your team, processes, and policies. Sourcing solutions that are supported by mobile apps can give users (regardless of their technical aptitude) easy ways to submit purchase and expense requests, empowering more productivity and accountability for their spending habits. The advent of cloud technology has also enabled greater affordability, and scalability. Now, you can extend simplicity, efficiency, and control to the edge of your organization, in contrast to limiting user licenses to a finance team, for example, an all too familiar occurrence linked to expensive and complex legacy technology.
Your company’s unique requirements will determine what deployment model best suits your needs. Once you’re clear on the right deployment route to take, you’ll need to narrow down your key objectives, which will shed light on what features you’ll need to source during your software review process.
Interrogate your current processes and determine if, for instance, you simply need an easy-to-use system that automates requests and approvals and integrates with your accounting solution. Perhaps you require software that enables easy catalog configuration, for approved vendors. Would a PunchOut catalog integration streamline frequent purchases and approvals from an ecommerce site, where your staff are currently overspending due to a lack of control, or inadequate processes? Does your team submit unverified expense claims, and more stringent policy compliance is needed to mitigate risk? Would a solution with advanced reporting capabilities solve how you manage multiple budgets and spend by supplier?
Having a clearly defined list of goals for deploying procurement software is essential.
Let's get into the research-driven steps to choosing your procurement software solution.
3. Look for procurement software solutions with expertise in your industry
When researching different solutions, it's wise to search for software providers with extensive experience in your industry.
Solutions with a cross-industry footprint will offer feature rich solutions that cater to a diverse set of requirements.
Here are some examples of industry-specific needs:
- Property management companies often require spend, purchase order, and budget control across multiple buildings, projects, and legal entities.
- Non-profits need transparent and auditable cost allocations against grants, funds, or donors.
- Biotechnology companies choose to empower lab managers to purchase from major medical vendor catalogs, with sound project approvals and policy controls.
If a solution provider has a proven track record within a particular industry, it’s an indicator that the system successfully solves challenges experienced by that sector.
By deploying such a solution, it can have a meaningful impact, and drive measurable results by solving industry-specific challenges via tried and tested features and functionality.
From efficiency gains, to reduced operational costs, or more control in times of economic uncertainty, knowing what your desired outcomes are will steer your software search and help make the shortlisting process much simpler.
4. Review customer feedback
While you may learn a lot from a procurement software provider's website or social media presence, you need to see what verified end users are saying about their experience with the product. Reputable software marketplaces and review platforms will highlight solutions by category, with company information, feature lists, pricing information, and, most importantly, validated customer reviews.
You can learn a lot from the following independent peer-to-peer software review sites, some of which gain millions of visits from professionals seeking unbiased information:
A helpful feature to look out for is the overall score on Capterra, for example, which aggregates the rating from 1-5 points on crucial software touchpoints like the ease of use, customer service, software features, and value for money.
The reviews will usually outline the pros and cons of the software solution while also listing information about the customer who left their feedback, like their role and industry, which provides further insights for consideration. This will narrow down the list of solutions best suited to your business requirements.
5. Build a solid business case
Now that you have identified the need for a procurement software solution, outlined a deployment process, defined a must-have feature list, and short-listed a set of potential solutions, you can create a compelling business case to gain buy-in and approval from key stakeholders.
Transforming a critical business function like procurement affects people, processes, and operations. It's essential to present the business case clearly and effectively to ensure that all parties understand the impacts of implementing a procurement software solution and the benefits and value it will drive for the company. For tips and justifications to include when building your business case for procurement software, click here.
Is the procurement software solution cost-effective and scalable?
A good procurement software solution should be cost-effective and scalable, offering an affordable subscription model and the ability to scale the system’s usage as business needs evolve and grow. Your business case should explain how a successful software solution can not only save you money but will also enable your company to take advantage of new services (solution providers should have a track record of product development that continually optimizes and enhances the offering), partnerships, and integrations that further optimize business processes.
You can focus on presenting the main benefits of a procurement software solution to each stakeholder group and show that you’ve thoroughly analyzed existing problems, potential solutions, and risks. The business case will then promote greater stakeholder alignment and support while acting as a driving force of mutual understanding during the buying and deployment stages.
6. Request software demos
We have reached the most experiential part of finding your company's ideal procurement software solution, which is approaching providers for demos. Attending software demonstrations is a decisive step to success as you can verify that proposed procurement tools perform as promised.
During pre-demo discovery, be sure to share detailed requirements, problem areas, and unique challenges; this gives the product specialist the opportunity to prepare a meaningful demo that will give you insight into whether the software will indeed solve your challenges, or not.
Attendees get to see the procurement software live and in action, giving a practical understanding of how the product works and whether it will be a good fit for the organization. The goal is to test as many features and components as possible, simulating actual scenarios and procurement processes that your company carries out.
This is also an excellent opportunity to take notes to compare it to your current procurement process or system and the other options you have selected for consideration.
The ultimate goal of the demo is to provide you with the chance to understand and test the procurement software solution against your unique business challenges, to better understand the features offered against what you require. Where a solution lacks in required functionality, map it back to your key requirements to determine if the feature is mission-critical, or not. Be aware of overzealous sales consultants who promise to “build whatever you need” be sure to ask for reference customers that can attest to that level of customization.
Be prepared in your demo-based testing to ensure that you will be adequately informed before selecting and deploying any software.
7. Make your choice
Once each of the steps above are completed, you can move on to selecting the right procurement software solution. Ultimately, it all boils down to choosing one comprehensive solution that best supports and enhances your company's procurement process and organizational objectives.
Decision makers should now have greater certainty about the best software to select for the company’s needs.
A guided approach toward procurement
Navigating the procurement software landscape, and its many options, features, and alternatives can be overwhelming, but selecting the right solution will ultimately be rewarding, and beneficial to the organization and end-users alike.
As a leading procurement software provider, with decades of experience, Fraxion has guided a diverse range of companies around the world on a journey to transform their processes. From automating procurement processes for the first time, to equipping finance teams with the tools to effectively manage spending and budgets, to replacing legacy or existing technology, we’re committed to understanding unique procurement needs and helping small to medium-size businesses solve them, while gaining efficiencies, visibility, and effective spend management.
If you're ready to see Fraxion in action, sign up for a custom demo. We'd love to understand your requirements and show you why our procurement software solution is top-rated by users.