Why Does An Organization Need An E-Procurement System?
An e-procurement system aims to streamline the process for employees to search, compare, and purchase items throughout an online store. This internal system operates a lot like traditional e-commerce websites with added layers of functionality to support the buying organization’s policies and regulations.
There are lots of moving parts in large organizations, and e-procurement systems can help companies overcome procurement challenges like:
- Save Employee Time: The procurement process in large organizations can be long and tedious as employees have to check pricing, vendors, and compare to procurement policies manually.
- Automate Approval Workflow: Sometimes, an employee will need to make a large purchase outside their budget permissions. Instead of wasting time with emails and phone calls, an e-procurement system will send a purchase request to the appropriate department manager for approval as needed. The system handles all the heavy lifting and communication so employees can focus on their job at hand.
- Access Preferred Vendors: Organizations typically have preferred vendors to ensure low prices. An e-procurement system stores vendor contact information, payment terms, and other information for easy retrieval and review.
- Improved Budget Control: Organizations are looking for ways to reduce overhead, and e-procurement systems ensure employees never spend more than they are authorized to spend.
- Streamlined Record-Keeping: Once a purchase is approved, an e-purchase system handles the communication of purchase orders, shipping/receiving confirmations, and invoice management for accounts payable.
- Preventing Dark Purchases: Dark purchases are items that are bought by an employee that falls outside of the organization’s defined procurement process. Dark purchases are uncontrolled costs, and companies can experience lost revenue if dark purchases are not controlled.
- Resolve Sourcing Issues: Supplier management is a critical challenge for procurement professionals. E-procurement systems help organizations keep track of quality, vendor performance, and other complications.
- Shortened Procurement Cycle: Sometimes, items are ordered with urgency, but the long purchasing process can end with employees not receiving their items for weeks or months after the scheduled delivery date.
- Enforce Risk Management: All procurement processes contain inherent levels of risk to compliance, policy adherence, and conflict between participants.
While the procurement process is complicated, employees need to order the goods and services to do their jobs. Enterprise-level companies and organizations need a system to help employees purchase items from approved vendors and streamline the entire process.
E-procurement systems are a necessary component for all large organizations, and one way to support an organization even more is with the PunchOut solution.
