The Future of Business: Embracing the Power of E-Procurement

Implementing the E-Procurement System was a favorable outcome in the whole supply chain management of McDonalds, the traditional procurement methods were not up to the mark as it consumed more time and had high costs. Switching over to e-procurement provides the backbone for the end-to-end logistics function and supply chain management. It has also helped business owners to purchase materials at a nominal price, eventually lowering costs for the firm. As per McDonald’s supply chief Edwards "E-Procurement allows 85% cut in costs"     

Considering the success story of Macdonald, adopting e-procurement is a necessity for organizations to stay competent in this complex business landscape.

Enhanced Supplier Relationships

The firm’s relation can be improved with a continuous practice of e-procurement dealings which can lead to trust and future partnerships. The e-procurement platforms make the communication seamless which fastens the business operations and stays proactive in the highly competitive market. More importantly, the platform is unified, so that the businesses can submit all the required documents associated with the procurement process and suppliers can look into their orders, provide invoices, and monitor payments. Consequently, these seamless dealings make the relationship stronger, contributing to impeccable service delivery. Hence, it is essential that the organizations should make use of the e-procurement platform for the business requirements. 

Toyota, a leading automotive manufacturer, made fair relationships with its suppliers by using e-procurement and improving collaboration all over supply chain. The platform has allowed the firm to communicate effectively with suppliers, lowering lead times.

Andrew Bartolini, Chief Research Officer, Ardent Partners says ""E-procurement is a cornerstone of modern supplier relationship management strategies"

Fast and Efficient

The present era is driven by advanced technologies in which companies act swiftly to meet the needs of their customers. Several industries deal with procurement or e-procurement to get into business requirements. However, dealing with traditional procurement methodologies is a time-consuming process as it involves heaps of documentation, manual approval, and more. To eliminate all these complexities, e-procurement system plays a vital role in automating the end-to-end procurement process and can be performed with a system that has an uninterrupted internet connection. More importantly, it lowers the time needed to finish the dealings and keeps the workforce ready to perform other critical tasks.

For instance, the retail giant Walmart utilizes e-procurement to handle its huge network of suppliers to make sure the products are available in the store and online. Their e-procurement system allows them to locate products with no complications and monitor stock levels.

Cost Reduction

Companies dealing with massive purchases always focus on reducing costs as it impacts profitability. E-procurement assists firms in accomplishing cost reduction in various ways. Since the complete procurement is automated the organizations are highly likely to lower the managerial cost, and also, the errors will come down, contributing to more savings. Besides, it gives a clear picture of price comparisons and massive purchasing, helping firms to choose the best deals ending in less expense. The firms can leverage an e-tendering system wherein they can submit their proposals for the goods or services they opt for. In the end, suppliers will come up with offers on this platform. Hence, they can pick their offers that meet their expectation, and this will also help in saving costs.   

The leading technology firm Cisco uses e-procurement to minimize cost in the overall process; with the adoption of the latest e-procurement system, the firm has smoothed the purchase workflows and improved stock levels and efficiency in supply chain activities. 

Bill Michels, Senior Vice President at CIPS Americas says ""E-procurement provides significant benefits by enhancing transparency and visibility into spending, which is critical for effective cost management"

Informed Decision Making

In this modern era, informed decision allows the firm to examine the information derived from the ancient data and make them aware of the market. It plays a significant role in helping the organization in finding the right supplier, better deals and cost saving options. As the organization is well-aware of the past data they can predict the demand more clearly which will help in regulating stock and lower supply chain expenses. Moreover, when firms deal with bulk purchases, there is a risk involved in it which can be mitigated through data driven analytics with appropriate measures. Hence, whatever the firm’s activities are; whether e-sourcing or e-tendering or anything related, informed decision streamlines the overall process.

IBM for example has utilized e-procurement methods in its business operations to streamline procurement tasks and improve decision making. The firm has a centralized platform to handle end-to-end procurement functions which helped it accomplish cost reductions and make data-driven decisions as well.

Sanjay Puri, CEO, C1 India, says "AI has transformed e-procurement portals from platforms where buyers could procure products to tools that help make crucial business decisions"

In a nutshell, traditional procurement methods take more time in getting the activities done and it’s high time for the organization to switch over to e-procurement. By making use of this platform, the firms can enjoy heaps of benefits by reducing the cost, transparency in dealings and maintain a good relationship with suppliers. Even the challenges might involved in the e-procurement process but it’s all about understanding the end to end process so that the complexities will come down, contributing to smooth dealings. Undoubtedly, when technology becomes more advanced, e-procurement will make the businesses even more efficient in the digital age.