Achieving value addition through eProcurement software
E-procurement software defines metrics for measuring processing time and costs. Effective process management adds value to businesses. Information flow and supply chain visibility help manage the complexities of a fragmented procurement system.
Dynamic supply chains add value to business processes. Real-time visibility is an important factor in achieving supply chain agility. Visibility of end-to-end processes has the effect of mending fractured or inconsistent links along the supply chain. Value addition should impact businesses directly and indirectly. Direct benefits include cost-savings and faster processing times. Indirect benefits are aplenty including vendor familiarity and trust, better quality goods and services, and brand awareness. eProcurement software helps businesses leverage key resources. This in effect drives value and growth through information assimilation and management.
Procurement management is a cross-functional activity that requires constant coordination between various teams. Value addition is principally dictated by the supply chain proficiency in meeting the buyer’s inventory requirements, and the vendor’s capability in fulfilling those requirements. A central dashboard that catalogs sales, manufacturing, logistics, procurement, and finance can address inventory management issues. Organizations gain a clear view of inventory management when they can secure real-time data of other enterprise functions. Information flows help build strategies for securing better deals. Through effective deployment of eProcurement software, organizations can reduce transaction costs because the entire process is done online. The response time for bids is also quick compared to traditional procurement. Online procurement by its very nature necessitates reverse auctions. Because one buyer is able to engage several suppliers, the price of the product will typically decrease as the sellers undercut each other. This benefits buyers as the purchase costs come down drastically and awarding the contract takes weeks instead of months.
The valuation of business processes using eProcurement software is high because organizations will be able to recover investment costs faster. Booking revenues this way will improve the cash flow. Also, businesses will not have to endure the risk of inventory obsolescence as procurement enables the induction of just-in-time strategies. In conclusion, procurement software dictates a new imperative for growth sustenance.
