With E-procurement slowly becoming the fad in the technological world, there has never been a better time to understand the main advantages of this system. There are many benefits in using the E-procurement systems, as opposed to traditional paper based manual processes. Some of the main advantages are listed below
- Cost Reduction
The main reason for companies to go for an E-procurement system is to achieve cost reduction. With an E-procurement system in place, companies can have more structured supplier relationships and are more likely to closely tie their manufacturing to actual demand. This is so because E-procurement systems drastically reduce the approval times and makes the company more agile to demand fluctuations. Therefore it reduces the need for large buffer inventory. Cost are also be reduced by eliminating paperwork, human errors and avoiding rework.
- Superior Productivity
E procurement systems are quicker than traditional procurement systems. Since the entire process is automated, any unauthorized spending can be eliminated, administrative costs can be slashed and spending patterns can be analyzed to better manage purchasing. A well networked procurement system will help companies track the periodic demand patterns for their products. This information will help companies anticipate the future demand scenarios and prepare for it well in advance.
- Clarity in spending
Transactions can be centrally tracked when there is an E-procurement system in place. This enables easy reporting of items purchased, purchase orders and completed payments. Once you have a better understanding of where your money is going, you can optimize your company’s spending to meet organizational goals.
- Better Control
E procurement ensures control through regulated approval processes and workflows. Compliance to purchase policy and contracts can be ensured as users can purchase products only from the preferred list of suppliers. A fully integrated electronic purchasing system makes it easier for all departments to conform to the company’s procurement policies.
- High speed error free transaction
Since the entire procurement process is electronically handled, the procurement cycle times are reduced and the company becomes more agile to fluctuating market demand. The E procurement system also removes manual human errors and makes the entire procurement process more efficient. It is also environment friendly as it completely eradicates the use of paper in the procurement cycle.
E procurement is one investment which will immediately boost the company’s procurement efficiency and will definitely help in achieving long term cost reductions.