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The top 5 considerations when choosing procurement software
Robust and effective procurement software will allow your organization to take its entire procurement process online. With a comprehensive, feature-rich solution, your organization will gain a rapid ROI due to enhanced workflow automation, increased transparency and efficiency, internal controls, and reduced errors.If your prospective procurement software doesn’t drive time and cost savings, deploying the solution is not worth your while. So how can you be sure that the solution you choose will help your organization drive forward its strategic procurement objectives? By checking that the procurement software features enable these key factors:
1. Cloud agility
When choosing procurement software, agility and flexibility are key considerations. These cloud-enabled factors are essential for business continuity, a remote workforce and supporting digital transformation objectives.
Dell reports that companies that invest in cloud solutions achieve up to 53% faster revenue growth than their competitors. They also see significant benefits in security and compliance levels. So, what exactly is a cloud solution, and how does it achieve this?
Put simply, cloud procurement systems are hosted on the internet instead of on your organization’s local hardware and office computers. One of the most significant advantages of cloud computing is that data is centralized and accessible to all authorized employees. With a single source of truth, employees don’t have to cross-check different data sources. They can avoid making errors with a clear view of requisition revisions, updates, supporting documentation and original electronic versions of purchase orders and invoices.
With cloud procurement systems, departmental and team collaboration is streamlined, and silos are broken down and replaced with efficient workflows and transactional visibility. This cloud agility extends even further with procurement solutions that offer a mobile app. As a result, your employees can be productive at home, in the office, or on the go with any device they choose.
Mobility is more important than ever with pandemic-induced business restrictions affecting all industries differently, especially in global organizations. With increased ease of use and accessibility, your cloud procurement solution will drive healthy user adoption, a critical factor in determining the success of your investment. Empower your staff to operate within a defined spend management framework facilitated by cloud procurement software. The result is a cost-conscious spend culture across your entire organization, even in remote locations.
A cloud solution enables your procurement data to be more secure than it would be on-premise. The reason being that the data is encrypted over networks and stored within databases. These security measures protect your organization’s data against external threats, unauthorized employee access, and in the event that devices are stolen or damaged. Additionally, you can alter the security settings by user to gain further security assurances.
Overall, cloud-based procurement solutions are the clear way to move forward for their significant flexibility, security, and productivity enablement.
2. Procurement software features that offer cost & time reductions
Let’s dive into arguably the most important reasons for choosing an advanced procurement system: cost and time savings. Your procurement solution should include features that proactively manage spend and reduce time-consuming admin while driving accountability and data accuracy.
Requisition-to-PO and expense management
An essential feature is an automated requisition-to-purchase order and expense process. Choose a solution that fast tracks these processes by automatically routing requests, claims and approvals, notifying the right person when action is required. If an approver is out of office, they can delegate proxy approvals to another team member who will complete their review for them and prevent the request from getting delayed. That is, if the out-of-office approver hasn’t already conveniently authorized it from their mobile device. The system should enable escalating multi-level approval workflows, electronic purchase order generation from approved requests and fast-track expense reimbursements.
Another cost-saving feature is instant access to real-time budgets. Maintain budgets and eliminate overspending by enabling authorized approvers to access budgets at decision points. Your procurement software should guide purchasing behavior, empowering approvers to make informed decisions and gauge the impact of spend against budgets or projects before committing to spend.
Electronic audit trails
Data transparency and accountability is increased by audit trails available in procurement solutions. An audit trail refers to the history or log of all activity that has occurred within the cycle of an expense report or purchase requisition and approval workflow. It shows the date, time, and user activity, from requests and approvals, to changes and rejections. With complete visibility into audit trails, users no longer need to waste their time chasing after requisitions or trying to find the status of a transaction in process. Instead, they can review all transactions with supporting documentation and data insights at their fingertips.
Channelling spend to high-performing, authorized suppliers is a highly effective procurement strategy for gaining spend under management. Fortunately, supplier onboarding controls and catalogs can streamline this process. Within an advanced system, procurement teams can create and host internal catalogs that feature approved products from authorized suppliers. To save time, employees can create carts and fixed order templates.
Procurement teams can reduce costs by strategically purchasing items in volumes that qualify for discounts. The procurement system should route requests for authorization prior to purchase order approval, ensuring proactive spend control.
To drive even more savings from strategic suppliers, source a solution that offers vendor PunchOut catalog integration. Navigate from a purchase request directly to a supplier’s online catalog in real-time. There you can easily add items to your cart thanks to a familiar online shopping experience without leaving the procurement solution’s interface. All items reflect in your purchase request as soon as you check out.
This feature offers many efficiency benefits. Users have access to millions of products from one source, reducing the need for price comparisons on numerous sites. Requisitioning and order processing is streamlined, speeding up the purchasing cycle.
Plus, all catalogs are maintained by PunchOut suppliers, so your organization only sees accurate, updated item information regarding any changes to:
• Stock availability
• Precise item details
• Current discounts
• Shipping costs
Since purchase requisitioning occurs within the procurement system, all budget and policy checks, and approval workflows are in place, ensuring compliance and eliminating rogue spending. The result? Procurement gets the best value from strategic vendors while simplifying the purchasing journey for the team at large.
Spend visibility and reporting
Your procurement system should provide complete spend visibility and analytics. By categorizing and analyzing spend by user, department or supplier, you can identify saving opportunities and make informed decisions around budget cuts and allocations, and which supplier relationships to develop or phase out. Your spend data can even be leveraged to negotiate bulk discounts or early settlement rates.
Choosing software that enables data insights, extraction and analytics can inform your procurement strategy and ultimately boost your bottom line.
To achieve end-to-end efficiency, you want to ensure that your procurement software offers integration with third-party business solutions, such as accounting or ERP solutions. With integrated business systems, you can eliminate human error, repetitive tasks, and admin-intensive processes.
By connecting disparate solutions and business processes through various integration methods, you also achieve data transparency, seamless procure-to-pay efficiency, and measurable savings.
When selecting your procurement system, a key consideration is if the platform enables Application Programming Interface (API) integration.
More and more organizations are turning to API-led integrations that provide a seamless flow of data between multiple applications with reusable assets and quicker roll-outs and results.
The option to integrate your procurement software with third-party industry applications via APIs improves collaboration and productivity across multiple cloud-based apps. Easy maintenance, agility and enhanced operational visibility are key benefits of these innovative connection gateways.
Simple but often overlooked procurement system considerations are accessibility and ease of use, which are essential to driving healthy technology adoption levels across your organization. As previously mentioned, a cloud solution certainly provides these benefits. Still, there are additional procurement software features you may want to consider.
Your procurement system should have an intuitive interface that's easy to navigate. Consider if the system you’re looking at allows users to easily create and submit their requisitions and expense claims, on any device, from any location. Furthermore, your system should allow configurations that only permit appropriate users to perform certain functions or access sensitive data.
Consider solutions that require minimal end-user training and offer simplicity that will drive adoption with non-financial users. As purchasing and expenses occur daily at all levels in an organization, the more buy-in you can achieve, the more savings will ensue.
The final consideration you need to make when choosing a procurement system is if it can scale with your business as it grows.
Does the procurement system offer a cost-effective pricing model that allows more users to be added at any point? Does it give them access to all the features in the original subscription at an affordable rate?
Determine if your organization will be able to automate internal controls that mitigate risk in large-scale procurement processes. These can include:
• Policy compliance management
• Alerts that highlight risk and flag noncompliance
• Budget controls
• Real-time email notifications and in-app alerts
• Automated workflows and multi-level approval routing
These features increase accountability and improve control around spending processes as the user base and workflows grow. Procurement managers and other relevant parties can monitor company-wide spend behavior with instant notifications of requests moving throughout the requisition-to-pay process, and requests or invoices that require further review. The result is a comprehensive, optimized system that uses automation to speed up processes, improve accuracy and prevent extra manual work.
Level up your procurement processes with Fraxion
Fraxion is a true cloud procurement software that enables proactive spend management. With Fraxion, your business spend is always tracked, approved, policy compliant, and in budget. In fact, Fraxion was featured by Quandary Consulting Group as a market leading procurement software for cutting costs and increasing efficiencies.
It provides a comprehensive feature set, so your organization has every function needed to automate and streamline the entire procure-to-pay cycle. ERP and accounting integrations improve efficiency and accuracy, and spend visibility improves accountability and auditability.
Curious to learn more? Request a custom demo today for a detailed review of the solution in parallel with your business requirements.