Procurement is the lifeblood of your business model, yet procurement software is probably furthest from your mind when you’re trying to grow quickly to meet demand.
You purchase raw materials, replacement parts, and equipment to make your production lines hum during all three shifts as you crank out finished products to send to your customers who love your products and love your time to market.
You have tight deadlines to meet, you need to keep your workers happy and busy, and your hardware is humming on all pistons.
You don’t have time to think about anything else, let alone the future.
But what if you did have time to think about a growth strategy?
Right now, you’re just trying to maintain the status quo, including your procurement process.
How about moving away from your Excel spreadsheets towards automating your purchasing?
We’ve got a procurement solution for you that will give you time to think about improving your processes, expanding your offerings, and helping your company grow.
Let’s see how procurement software drives business growth by putting you in touch with the right tools.
First, we answer a couple of questions.
What Is Procurement Software?
Procurement software, sometimes called eProcurement software, purchasing software, or purchase order software, is an all-in-one platform designed to give you a suite of digital tools that helps you effectively manage your purchasing process.
The best procurement software offers these tools and more:
- Procurement process automation
- Purchase order automation
- Cloud-based access
- Administrative management based on job title
- Spending analytics
- Supplier management
- Supply chain management
- Spend management and analytics
- Contract management
- Electronic invoicing
- Procure-to-pay optimization
- Inventory management
- Budget tracking
- Invoice processing
- Accounting integration
You have a wide range of choices for eProcurement software because many companies have perfected these platforms to make your procurement process easier.
Another good thing about procurement software solutions is that competition is fierce, which drives prices down. Plus, digital transformation and data analytics are becoming the norm for businesses of all sizes, from startups to large retailers.
Now is the perfect time to invest in procurement software for your small business.
Why Do Small Businesses & Startups Need Procurement Software?
Your time and money are valuable. You barely have the energy to deal with 10 minutes of problem solving, let alone spending two hours trying to track down purchase orders that have gone missing while a big order has to go out.
Take a look at some typical reasons why small businesses and startups need to invest in procurement software sooner rather than later.
Your engineering team can standardize and streamline purchasing processes. Your day shift engineer on Line 1 needs another piece of equipment because one of the extruders isn’t giving that line the results they need. He puts in a purchase order request right there on the line through his tablet computer. You, as the engineering director, receive an email alert for the purchase requisition. You look over the budget numbers within the procurement software suite, and approve the purchase order. Your line should receive the new equipment in three weeks.
Better Spend Management
Procurement software gives your engineering teams better spend visibility.
For example, you notice the equipment is breaking down more often on one line versus another, even though the same machines are making the same products. You task that line’s engineer to solve the problem. He narrows it down to a roller that functions just barely within normal parameters, but not within the same parameters as the other lines. You put in a purchase order for a part to fix it, and the line gets back to normal after that.
Would you know about this anomaly if you didn’t have an all-in-one place to compare spending? Spend analysis is a powerful tool to find inefficiencies in equipment, people, suppliers, and purchasing.
Enhanced Data Accuracy
All of your purchasing data is in one place with procurement software. You don’t have to hunt down a wayward purchase order to match with an invoice, nor do you have to worry if someone double-entered a purchase order into a spreadsheet that three people have access to. Procurement management software has it all right there for you.
Lower Your Costs & Build Value
Spending less time on your procurement process gives you more time to focus on improving your business model, whether you need to shorten your time to market, find better raw materials and suppliers, or improve your equipment. When you worry less about purchasing, you can add value to your products. Over time, adding value allows you to adjust pricing to match your output.
Speed Up Digital Transformation
Digital transformation has been a buzzword for nearly a decade, and you’ve probably heard of it among your professional network.
But now, small businesses and startups alike can start to compete with their larger, more lumbering competitors thanks to advanced software tools, machine learning, and AI that can give you insights into your raw purchasing data.
Couple better procurement management software with lower prices, and you can’t afford to be without this type of digital tool.
Make sure to include procurement software in your digital transformation plan. The benefits of this tool go well beyond your procurement team and percolate up to your strategic managers and directors.
How Does Procurement Software Help My Company to Grow?
Your chosen procurement software for small businesses allows you to optimize resource planning and business processes while enhancing decision-making as you look to grow.
For example, you started with small business procurement software that merely helped you place orders from suppliers while tracking spending and creating electronic purchase orders. That was three years ago when you received your first seed funding. Then COVID hit, and you couldn’t invest in newer software even though your procurement team begged for a better procurement solution.
Even with concerns about inflation, a better procurement platform offers more advanced tools than the basic software you bought three years ago. You’ve outgrown your old procurement process and you can’t afford to miss an opportunity to grow.
Better Spend Analysis Data
Digital transformations are all about data. Advanced procurement platforms, readily available on the market today, give your small business or startup the tools and insights your procurement team and engineers need to effectively track, manage, and analyze this type of spending.
A robust procurement platform centralizes all purchasing information in one place. It integrates with accounting, budgeting, and financial software so you can make the right decisions about company growth.
You are trained to look at numbers and make strategic decisions. Having access to key purchasing data offers one way to make your procurement process more efficient.
For example, your procurement numbers look off for one particular supplier. You’ve been spending more money progressively over the past two months, and your purchases from that vendor are up 10 percent.
You need to figure out why, because if that 10 percent keeps growing, you may need to raise prices or find other ways to cut costs. You call the supplier personally. The owner says they are having trouble keeping good help on staff, so they had to raise labor costs which they passed on to their customers.
While you understand your supplier’s predicament, the fact that they didn’t warn you of sudden price increases bothers you. The person who authorized the purchase orders from this supplier did flag the orders because they came in higher than before. However, neither that person nor you understood how many times that supplier raised prices.
Because you have extra time on your hands due to a more efficient procurement process, you can investigate a better supplier with fewer pricing problems. It turns out, you found a supplier that saves you 10 percent on purchases compared to the previous vendor’s original prices, and they deliver faster.
You can find other efficiencies and room for growth with procurement software for your small business.
You can gain other insights from spend analytics such as:
How to manage strategic sourcing when supply chains become more expensive due to logistics issues or sudden changes in demand worldwide. If you deal with 50 suppliers, this lets you see which ones have issues all in one place.
Understand when you need to replace equipment or purchase better raw materials based on purchasing patterns. Did you spend more money on maintenance in one week than normal? You can send your engineers to find the root cause and fix the problem.
Should you raise prices? Have you paid more for logistics and raw materials lately? A cost analysis lets you determine how to mitigate rising prices from your vendors.
Find the Right Small Business Procurement Software for You
Investing in purchase requisition software can pay for itself in labor costs for your management team, better insights in where to cut spending, and spend analytics to help you determine how to grow.
ControlHub provides a robust purchasing software suite that gives you the insights you need to make data-driven decisions about the future of your startup or small business.
We look forward to hearing from you!