5 Tips for Choosing the Right Procurement Software

You need to do lots of research to find the best solution for you and make sure you find the right solution that addresses your challenges.

4 common challenges in procurement

Let’s start with defining the usual challenges businesses face in procurement. These are:

• Complex processes: Documents for purchase requisition, purchase order and receipt can be difficult and time-consuming to prepare.
• Inaccurate and unintegrated data Not having transparency and overview of commodities, required items, and vendor complaints.
• Poor time management: Losing track of schedules and various details in the process.
• Fraud: Kickbacks, bid rigging and frauds could occur.

Without proper procurement, a business could run into many operational problems, delaying or even pausing production and service delivery in an organization.

Some good procurement software examples include:

• Pipefy
• Tradogram
• Kissflow Procurement
• Precoro
• Basware
• Prokuria

Ultimately, the best procurement software in 2022 is one that fits your needs and business processes the most. Hence, you should consider your own requirements first and foremost before getting one.

Any company that wants to ensure efficient procurement should look into investing in good procurement software— a digital tool that can help monitor and automate processes like material purchasing materials, maintaining inventory, and scheduling restocking, among many other things.

So why use procurement software? Here are some benefits of using the best procurement software you can get your hands on.

Optimized approval workflow

There are complicated approval processes that can quickly turn into bottlenecks in procurement. As a result, large corporations and operations end up having silos in their procurement and resource planning divisions. Procurement software helps optimize the approval workflow to ensure that requests for restocking and purchase get a go signal as soon as needed or even earlier.

One great example of how procurement software improves approval workflows is vendor approval. With a centralized system, companies can identify, vet, and approve relationships with vendors needed to supply raw materials and services to keep the supply chain going. Software can automate the approval flow process and create end-to-end workflows with rules that will keep approval channels going with as little to no human intervention as possible.

Improve communications

Good procurement software will also serve as a communications tool to ensure procurement requests go through the right channels. This way, key decision makers will be in the loop on certain purchases, avoiding overlap in order, which could cost the company a lot of time, energy, and resources to fix.

With improved communications— internally and externally— enterprises can maintain compliance and governance. This helps ensure that procurements adhere to rules the organization and external governing bodies set.

Eliminate bottlenecks

By using procurement software, you also keep processes lean and bottleneck-free, helping supervisors and staff track progress more seamlessly. A good procurement system also helps identify any issues that might be causing unnecessary delays in production, logistics, and other parts of the supply chain.

Lesser bottlenecks mean more efficiency, which will result in better overall performance. Supply chain managers should work towards that goal as it helps operations hit its targets, which would mean great rewards for the company and its people.

Better resource management

Procurement software often comes with price analysis tools that help check bids from vendors and determine the best price point on goods and services with little to no human politics involved. Keeping resource management optimal through procurement software removes a lot of deadweight loss in faulty supply chain management and inventory management.

5 tips for selecting procurement software

So now that you know why having good procurement software could be advantageous for your organization, let’s discuss some tips that can help you when selecting and implementing procurement software. Here are some best practices for better procurement software selection.

1. Decide whether you need a cloud-based or on-site software

When selecting a digital procurement system, you’ll need to determine which type you’ll need. There are generally two types of procurement software— cloud-based and onsite. A cloud-based system operates online through a portal accessible via an internet connection. Data gets stored online and can be accessed by anyone with authorization from anywhere. This is a great option for corporations with multiple sites or who want to keep their procurement system flexible.

An onsite solution can only be accessed via an intranet, meaning you have to be in a certain place to use the system. When you have multiple sites, it could cost a whole lot more to maintain an onsite solution, as you’ll need to have a system per site. Onsite systems, however, have better security. Weigh your options and see which one will work best for your context.

2. Make a list of non-negotiable features

There are different types of procurement systems, each with a whole array of features that make them special. Some of those features include:

• Communication
• Supplier management
• Risk management and analysis
• Budget insight
• Policy compliance
• Approval workflows
• Work orders
• Audit trail
• Bar codes scanning and printing
• Planning calendar
• Reporting and extensive filtering

Determine which of those features (or other features you might be looking for in procurement) are non-negotiable for your organization. Start looking at procurement software options that provide those features and services and make a comparison.

3. Compare the top options

After you have three to five of the top options, take a look at them one by one and set the criteria for selection. Here are some of the top considerations when selecting procurement software for your organization.

• Does the software meet your expectations?
• Is it easy to learn?
• Does it have adequate backend support?
• Is it within the company’s set budget?
• Is the software reliable over the long term? Does it provide software updates?

Integrate with your other software

Having a tool that integrates with other softwares will also make it easier to ease it into your company. Procurement software should integrate with your asset management systems if you have one.

4. Assign a committee to set up and roll out

When rolling out software like procurement systems for a large corporation, there needs to be a lot of thought put into which software to use. More thought and help will also be needed when you’ve selected the software you’ll go for because then you’ll need to start implementing it company-wide.

Create a committee that will help with set up, roll-out, training and monitoring of the tool. It helps to build a committee represented by departments that will have direct touchpoints with the tool, including logistics, manufacturing, accounting, human resources, and other related sectors.

5. Evaluate the tool regularly

After you’ve rolled out a tool, the process will keep going. Times will change, and needs might evolve. So it’s important to keep evaluating your procurement software and determine if there need to be changes made to plans, processes, policies, or even the tool itself. Set evaluations once a year, at the very least. Try not to change your tool too many times in a given period, however, as this could cause software learning fatigue in your organization and affect operations negatively.

Embracing procurement software

The procurement software market is expected to grow by 10% from 2020 to 2025, signifying continual growth in adoption. So if you haven’t yet, it might be time to join the droves of enterprises that are turning to digital solutions for their procurement processes.