Chaotic procurement management is a way of life for too many organizations. Changes within an organization’s approach toward procurement allow chaos to flourish and blossom. The major reason behind this lurking menace is the manual and paper-intensive procurement practices followed by organizations. Manual procurement management is filled with high processing costs, lost or misplaced documents, sluggish approval cycles, missed discounts, and uncontrolled costs. Additionally, supplier relationships take a hit due to late payments, poor vendor management, inefficient dispute resolutions, and more. All these factors make an already messy procurement management process even messier. Relying on manual tools will create an inadequate, non-uniform procurement process that causes leakage of revenue, missed opportunities for savings and growth, or worse, outright theft.
To prevent the ubiquitous loss of money, effort, and control, organizations need to integrate all procurement functions, control spend, track purchases, and create an environment that enables growth.
What is procurement management?
Procurement management is the strategic approach to managing and optimizing organizational spend and it involves acquiring quality goods and services from preferred vendors within a stipulated budget, on or before the deadline. The procurement management process includes sourcing, requisitioning, ordering, expediting, inspection, and reconciliation.
What is a procurement management system?
- A procurement management system is a procurement solution that helps you streamline your procurement process end-to-end. It starts with requisitioning of goods and services & ends with payment.
- Usually, a procurement management system like Kissflow Procurement Cloud is comprehensive and contains several modules - eProcurement, AP automation, Strategic Sourcing, Supplier management, Contract management, Expense management, Inventory and Spend reports.
- A procurement management system should ideally integrate with Accounting, ERP, and other third-party apps.
Reasons to digitize procurement management
It will be no surprise to you to hear that relying on outdated, manual, paper-based processes to handle your procurement management activities is unlikely to offer your organization optimum speed, accuracy, or efficiency. In fact, it is probably costing you more along the way. It is therefore well worth considering how digitizing yourprocure-to-pay processcan offer you tangible benefits.
For example, you can benefit from automated workflows across all of your procurement activities. This means smarter performing processes with purchase requisitions, purchase orders, and invoices, making them easily trackable because they are automatically sent to the appropriate reviewers and authorized quickly and accurately.
What’s more, you can easily ensure your processes are legal and compliant and also benefit from a shared workspace to efficiently collaborate with your suppliers. The covid-pandemic has further accelerated the need for procurement automation and going digital definitely improves the efficiency of the process.
