eProcurement: Everything you need to Know
What is eProcurement?
eProcurement is an automated purchasing system that streamlines the buying and selling process from vendors. It is designed to make it easier for you to find the best prices, negotiate deals, and order products on time. As a result, eProcurement systems are used by large corporations like Walmart, Best Buy, and smaller companies.
eProcurement Definition
In simple terms, eProcurement is a form of procurement that uses electronic systems to automate and streamline the buying process. In more technical terms, it's an online system that automates the procurement process from quotation requests through order fulfilment.
eProcurement can be used for both business-to-business (B2B) and business-to-consumer (B2C) transactions.
For me, eProcurement is an outdate term and we should instead focus in on Digital Procurement and the Digital Procurement Tech Stack. But there’s some merit to understanding the roots of Digital Procurement within eProcurement.
Benefits of eProcurement
eProcurement enables you to:
Improve efficiency
Reduce costs
Improve transparency
Reduce paperwork
Pitfalls of eProcurement
Security
Security is a significant concern for any business, and eProcurement is no exception. Security issues can negatively affect your entire company, not just the procurement department.
You can avoid these pitfalls by planning and implementing security measures early in the process.
Internal systems
As you move forward with eProcurement, your internal systems must be set up to handle the influx of suppliers and data. Make sure you have a robust supplier management system to handle the volume of suppliers you'll be dealing with. Also, ensure your ERP or accounting system is set up to take that same volume of data from new suppliers.
Key Features of eProcurement Software
eProcurement software includes various features that allow you to streamline the purchasing process. Some examples include:
RFX management will enable you to organize and manage supplier bids across multiple procurement cycles.
Contract management will allow you to track new contracts and modify existing ones.
Supplier management helps you to create and maintain supplier profiles, establish one-to-one relationships between buyers and suppliers, monitor open items with suppliers and more.
Order management for tracking orders in progress or completed orders through their entire lifecycle from creation through invoicing/payment processing.
Payment processing automation that allows users to quickly initiate payments through an automated workflow process without having access to financial data systems outside of the eProcurement system itself
Implementing an eProcurement System
The first step of implementation is to evaluate your current procurement process, identify the sources of spend, and decide on a budget. This information will be needed when engaging in the process of procuring an eProcurement solution.Â
Once you've selected an eProcurement solution, it's time to implement it. Once this is done, evaluate the results and make any necessary changes. Don't overlook the implementation of the eProcurement solution.Â
Conclusion
eProcurement is a great tool to help businesses save time, money and resources. A sound eProcurement system can help you achieve these goals if used correctly. Still, it's essential not to forget the pitfalls of using such systems, so be sure to research before deciding on one.
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