Online purchasing software helps manage an expanding supply chain network
High volume transactions in procurement can be achieved by constantly monitoring the procure-to-pay process from requisitions to final delivery. Online purchasing software provides the same opportunities but with an added advantage of enabling strategic sourcing and supplier management. The idea is to source goods and services at reduced purchase costs in a time-bound manner.
E-procurement software helps achieve this through the induction of reverse auctions. Reverse auction encourages the buyer to source from more than one supplier. The advantage of information asymmetry lies with the buyer as he is able to go online and study the supplier market before placing an order. Because one buyer is able to source several suppliers, the suppliers naturally tend to undercut each other in a bid to obtain business from the buyer. Therefore, the purchase costs can be brought down significantly.
By familiarizing oneself with suppliers, businesses could reduce maverick spending and improve the cash flow. E-procurement software also incorporates certain valuable metrics in the procurement process such as just-in-time, which improves the workflow tremendously. Real-time visibility improves the P2P process efficiency and helps procurement professionals align the goals of the organization more closely with spend management.
From the June 2015 Aberdeen report, it is evident that the best-in-class have 74% more spend under management than their competitors. Visibility into the procure-to-pay process is the key to risk and compliance management; e-procurement software helps achieve this because all transactions are recorded electronically and stored in a secure, searchable repository. In an environment where the pace of business continues to escalate, visibility is of utmost importance.
Multi-channel requisitioning performed online reduces supply chain risk considerably; new suppliers impact contract fulfillment positively in an instable environment, such as say, a geopolitical instability or even conflicts of interest at the negotiation desk. Automation enables strong contract management, consistency, and standardization of products sourced. A vast supplier database helps firms discard a renegade supplier who otherwise would have stalled the entire procurement activity.
Online purchasing software helps manage an expanding supply chain in a global marketplace by enabling procurement professionals to coordinate across each node and mode in the chain.