The Challenge Of Not Using An Eprocurement Tool
E PROCUREMENT TOOL
Electronic procurement is no longer an optional workflow for organizations operating in the modern age. Streamlining the acquisition process is essential for optimizing operational effectiveness and mitigating myriad of operational risks. key component of this process is an eProcurement tool, and procurement executives who fail to recognize this could be missing out on immense potential gains through cost savings, improved system integration, and data efficiencies.
There are numerous risks associated with not leveraging eProcurement technology. To begin with, user data is often siloed within manual procurement processes. This, in turn, can lead to gaps in visibility and control and can prevent procurement teams from quickly identifying payment discrepancies and preparing accurate reports. In addition, inefficient manual processes can lead to higher transactional costs, hampered accounts payable efficiency, and less favorable standing in vendor negotiations.
For quick cost savings comparison, manual data entry and invoice processing at rate of $1.00 per document often translates to $1.50 per document after implementing eProcurement software. Processing times are substantially reduced, significantly reducing the costs associated with capital, direct materials, and overhead. Similarly, organizations are able to identify pricing discrepancies much faster than before, which can lead to significant savings.
From long-term strategic perspective, eProcurement technology is often designed with operational scalability in mind, enabling organizations to securely collect, store, and analyze large volumes of data generated through the procurement process. Through smart analytics, organizations can identify key trends, create accurate forecasts, and adjust the procurement process in line with their desired growth trajectory.
Overall, operating without an eProcurement tool comes with significant risks beyond the aforementioned costs. Security is of the utmost importance, yet manual procurement processes often lack the necessary oversight to safeguard critical data from malicious actors. Furthermore, retrospective audit audits are increasingly seen as an archaic practice, and by using automated systems many of these manual steps are rendered obsolete.
In conclusion, it is clear that investments into eProcurement technology enable organizations to save costs, reduce risks, and progress towards more strategically solid foundation. Organizations looking to enhance their procurement process should strongly consider investing in purpose-built solution execute their source-to-pay processes.
