Benefits of Procurement Management Software Unveiled

ControlHub
April 10, 2022

The current business landscape has forced many companies to rethink the way they manage their procurement processes, especially those in the hardware-intensive industry.

The pandemic has highlighted the importance of having a reliable and efficient procurement system, especially in a time where supply chain management has become a challenge. As a result, many companies are now turning to procurement management software as a solution to streamline their procurement tasks and gain a competitive advantage.

With the right procurement solution, a company can automate many of its procurement processes, freeing up time for procurement teams to focus on more strategic tasks. In this article, we will explore the numerous benefits of procurement management software and how it can play a crucial role in digital transformation.

Why does your company need procurement management software?

The global economy continues to grow as emerging markets come out of Southeast Asia and Africa. Suppliers still face heavy demand in many sectors, particularly heavy metals and technology, while transportation and logistics companies face labor shortages.

Procurement management software goes by many other names, like eProcurement software, purchasing software, and procurement software. These platforms provide dedicated procurement solutions to help you digitally transform your procurement process. 

Ten years ago, procurement teams were happy to have automated purchase order generators that streamlined that part of the procurement process.

Advances in processing power and computer programs have led to machine learning, artificial intelligence, and advanced data analysis that puts real numbers in the hands of procurement operations specialists. The overall goal is not just to streamline procurement processes but to futurecast procurement goals months and even years in advance.

Procurement management software offers one place to store and analyze the data, while giving appropriate members of the procurement team access to purchase orders, approval workflows, and high-level tasks.

What features should procurement management software have?

When shopping for your chosen procurement software, look for platforms that have these main features in them.

Some platforms may have several tiers of software, some cheaper and some more expensive, that may offer varying degrees of functionality.

Streamlined Procurement Processes

Procurement teams that implement a robust procurement management software streamline processes by moving beyond manual, old-fashioned processes that modern computing can easily handle thanks to advanced software.

You get immediate labor savings and cost savings by eliminating human input errors and the need to integrate disparate software like accounting, requisition, form generators, and finance.

Data Analysis & Spend Analysis

Procurement software uses advanced programs and algorithms to perform data analysis and spend analysis on a regular basis. Procurement operations no longer have to wait on monthly reports to make decisions. 

Your spend data becomes the main driver for insights that will allow your company to compete on a bigger level. Data is the new gold standard, and the better spend analysis you have, the more money you can leverage towards investments, tools, and efficiencies.  

Your procurement solutions team can use insights from robust data analysis to standardize and streamline procurement operations for your entire company. Everyone should know what process to follow, how to fill out a purchase order, how long the purchase order approval process takes, and what to expect from order fulfillment.  

Data analysis gives you opportunities to reduce costs, continuously improve and refine procurement operations, and strategically plan for the future. Procurement experts in your company can devote more time to supplier management and supply optimization to put your company in a better position against competitors.

Improved Supplier Management and Supply Chains

Robust procurement software lets you manage supplier relationships and supply chains. 

Let’s say three people each fill out a purchase order for the same supplier, although the three of them don’t know that. The person who approves the purchase orders can see that those three orders trigger a discount with this particular supplier, and the procurement team authorizes combining the three purchase orders to get the discount. 

Not only do you save money on the purchase, but you develop a better rapport with your supplier, which helps a lot with long-term relationships.

Optimize Your Procure-to-Pay System 

Procurement software optimizes your procure-to-pay system by having all transactions in one place. Purchase orders, purchase order approvals, supplier communications, supplier invoices, and three-way matching all happen in one platform with a streamlined operation that reduces time to market. 

Maximize Source-to-Pay (S2P) and Source-to Contract (S2C) Models

S2P expands on procurement operations by requesting quotes from potential suppliers and current suppliers in an effort to continually find the best deals. Procurement software can automate this by keeping it to a few clicks and drop-down selections.

S2C lets you create standardized contracts and legal verbiage with suppliers. Much like a CRM for sales, top-notch procurement software handles the automation of turning quotes into contracts very easily.

Administrative Duties

Administrators of procurement software can handle purchase order approvals, disallowing suppliers, adding suppliers, altering purchase orders, authorizing purchases, and paying invoices.

Benefits of the Best Procurement Software

The benefits of moving to procurement software are numerous. 

Your procurement team may see shorter lifecycle times for purchase orders, invoice processing, and payment processing. This is because purchase orders are automated, and approvals are sent to the right people right away. Suppliers send electronic invoices upon receipt of goods, and you can approve those invoices for spending. Purchase orders may be flagged for not using procurement guidelines properly.

Better spend transparency, accountability, control, and security because administrators can see specific transactions and a larger picture with data analysis.

Improved supplier relationships through supply chain management, access to supplier performance metrics over weeks, months, quarters, and years, as well as better leverage for vendor negotiations based on the metrics and analytics. You don’t have to wait for end-of-the-month reports to make important decisions.

Standardization of Procurement Processes

All of your data is in one place, managed by your procurement processes. Admins have access to complete data via the user-friendly interface. Templates make it easy to create purchase orders, reports, contracts, and other documents. 

When everyone follows the same process, it reduces errors and improves efficiency. You no longer have to chase down someone for a wayward purchase order that got lost in the mail or misfiled.

Most importantly, automation reduces risk. You have everything safe and secure, stored in the cloud and only those with administrative-level access can perform certain functions. 

Scalability of Procurement Software

Your startup or small business may only need a smaller platform when you first purchase procurement software. 

As you grow, you will need more robust solutions as your procurement needs take off. 

Platforms must be cloud-based so they can work on any mobile device on the premises with wireless infrastructure you already have in place. This gives you real-time access to the information you need. If you receive an approval request from the other side of the plant, you can read the purchase order and approve it in minutes if necessary. 

More robust solutions also integrate with accounting and financial software to give you the ability to make purchases from within the procurement software.  

Need to bulk add employees or suppliers? Procurement software can handle that. 

Any time you grow, your procurement software should grow with you.

Enhance Purchasing Power

Consider integrating supplier catalogs within your procurement software to give you access to a full range of raw materials, parts, and supplies for your production lines. This way, you can see the full range of products and product categories to let you find the best value for what you need. 

Seeing entire catalogs let you know what you get for how much you can spend. You can also look for discounts, either through earlier payments or bulk purchases, to preserve working capital and cash flow. 

Optimizing Your Supply Chain

Here is where data analytics excels for procurement software.

You can analyze your supply chain to find inefficiencies, bad orders, shoddy products, or more expensive orders over the course of a specified time. You can examine vendor performance over a month, quarter, or year to detect seasonal fluctuations, supply problems, price increases, late orders, or orders that were short.

You can renegotiate contracts and prices based on these metrics, or decide to go with other suppliers if the situation is bad enough for certain vendors. 

You can flag vendors in your procurement software to make sure no one can order from them if they make it to your black list. However, you can keep them in the system in case you onboard them again. 

Pricing is the key here. When you analyze vendor relationships, you’re really trying to find the right prices for the items you need without sacrificing quality of materials. Having pure data gives you leverage for negotiations.

Enhanced Inventory Control

Do you have enough screws to get you through the next week? Procurement software can tap into how many crates of screws you have in your inventory and then you can order more automatically. Your staff doesn’t even have to fill out a purchase order for this because these materials are vital to your regular way of doing business. 

So long as the inventory levels meet your criteria, ordering can happen automatically. 

Let Your Procurement Team Pivot to Strategic Work

Your procurement team shouldn’t spend one moment longer on tasks that can be automated. Rather, they need to take more time to develop procurement strategies that help your company come out on top in a highly competitive race against supply chain snafus and time to market faux pas

Any efficiencies you can find lead to better labor management, improved relationships with suppliers and customers, and better strategic thinking when it comes to procurement. 

Your small business can purchase affordable procurement software that was once available only to larger corporations. You have plenty of choices out there.

ControlHub
is one procurement tool you should see. It can help you take control of your procurement system by giving you the analytics, streamlined processes, and templated forms you need to get more done with your procurement team. 

Contact us to see a demo of what we can do. You won’t be disappointed. 

Frequently Asked Questions

What exactly is procurement software?

Procurement software is like having an invisible, tireless, ultra-efficient procurement officer on your team. It simplifies the purchasing process, freeing up your team to focus on strategic decisions. It's a comprehensive solution that streamlines procurement operations and eliminates complexities.

Why is the best procurement management software necessary for my company?

The best procurement management software is necessary because it eliminates human errors, boosts operational efficiency, provides spending analysis, streamlines approval workflows, and standardizes purchase requisition processes. It's like a magical wand that brings accuracy, efficiency, and time savings to your procurement operations.

How does procurement software benefit small and medium businesses?

Procurement software benefits small and medium businesses by providing efficient spend management solutions, identifying spending patterns for significant savings, and offering centralized purchase order management. It's all about maximizing efficiency, cost savings, and streamlined processes for the true heroes of the business world.

What should I look for when choosing procurement software?

When choosing procurement software, look for comprehensive procure-to-pay cycle support, seamless integration with accounting systems and ERPs, mobile accessibility for real-time operations, a user-friendly interface, and enhanced operational efficiencies. These factors ensure smooth operations and an optimized workflow.

Why should I explore ControlHub?

ControlHub is designed specifically for hardware-centered, procurement-heavy businesses like yours. It's a comprehensive procurement management solution that revolutionizes operations. ControlHub aligns your procurement processes, enhances efficiency, and contributes to your company's success.

How can I request a demo of ControlHub?

Requesting a demo of ControlHub is easy! Just reach out to our team and let us know you're interested. We'll be thrilled to show you firsthand the magic of ControlHub and how it can transform your procurement operations.

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