Procurement Technology: The 7 Advantages of using Procurement SoftwareBusiness | August 01, 2022 | By
Every industry is talking about using technology to improve their supply chain processes This is because technology can significantly impact an organization’s bottom-line by improving visibility and cost-efficiency. Technology also helps increase the productivity of an organization. Applying technology to the critical area of Sourcing & Procurement will have exponentially increased the benefits. Increasingly, technology is being seen as a key metric when it comes to measuring the maturity of procurement organizations. The following points elaborate on the advantages of procurement technology.
Improved spend visibilityProcurement technology centralizes the tracking of spend. By structuring the spend across suppliers, helps the buyer leverage volumes and reduces costs. Organizations can also track cost reductions continuously. This results in higher savings. With procurement technology, vendor SLAs can be tracked. The organization is better equipped to manage risk, keep track of supplier scorecards and ensure contract compliance. Additional savings can be realized.
Increase in Accuracy of DataWhen the procurement process is digitalized, it streamlines the entire process. The chances for data errors are reduced. A whole repository of documents is available online which makes it easy to refer to previous orders and helps in ensuring contract compliance. Digitalization also contributes to transparency – one can track user actions ( who placed a requisition, who approved the purchase order) and view when orders were placed with the vendor. The technology ensures data integrity and user accountability. In short, one data set becomes the single source of truth and can be relied upon by all the stakeholders involved.
Improves Operational Efficiency
When the procurement process is conducted manually, a lot of time is spent communicating individually with each potential supplier, gathering all the replies and quotations from each of these suppliers, manually compiling the negotiation history, drawing up and reworking contracts. With digital technology, all communications happen online and simultaneously, within the context for every one of the 1000’s of parts in sourcing, order templates are available and purchase approvals can be done online. The templates for contracts are reusable. This helps expedite the procurement process faster and the transaction time is reduced.