E-procurement platform : What are the best practices to make it perform?
An increasing number of businesses are turning to e-procurement practices to reduce their overall purchasing expenditure and optimize their entire logistics process. Modern procure-to-pay practices also increasingly involve the implementation and utilization of online e-procurement platforms. Nonetheless, the very implementation of such a platform does not produce maximum results before you put in practice a number of best practices to optimize procurement management.
Obviously, e-procurement approaches will vary from business to business. However, there is a number of best practices enabling companies of different sizes and across different industries to maximize cost-income ratio by lowering costs and optimizing process efficiency.
Opt for Cloud-based Procurement Platform
You can adopt an on-premise B2B procurement platform but in this case, all the support, update, upgrade and maintenance tasks and costs will be up for you to cover. On the other hand, a cloud-based procurement platform offers all the features of a standalone solution but the service provider takes care of all the software updates and maintenance tasks while securing your data and transactions.
By adopting a reliable marketplace software, you enjoy the following advantages:
- • Supplier Management – Onboarding and managing vendors efficiently.
- • Safe Invoicing – Perform three-way matching for any invoice and any time.
- • Purchase Management – Customizable forms enable you to capture, approve and store purchase requests.
- • Orders Management – Automatically generate orders from approved purchase requests.
- • Analytics – Get actionable reports derived from past data.
- • Integrations – Connect your B2B platform with any other business software.
Adopting the right e-procurement solution for you requires a bit of research as there are a number of platforms on the market but this effort will pay-off once you implement and configure your cloud-based B2B procurement platform.
Define Strict Spending Rules
You can reduce spending costs and make your procurement process as efficient as possible only by adopting strict and well-defined rules regarding your purchases. Your business can maximize cost-income ratio and minimize fraud risks by putting in place policies that:
- • Clearly define all the procedures across all procurement steps
- • Track every step within the procurement process
- • Maintain a comprehensive list of vendors and suppliers
- • Take advantage of bulletproof procurement contracts
- • Envisage auditing procedures to perform on a regular basis
Having such procurement policies enables your organization to make informed choices and avoid random purchases.
Proactively Engage Vendors and Suppliers
A global B2B procurement platform and marketplace offers numerous options for a business to actively seek and engage with a large number of partners and vendors. Manually researching, approving and onboarding vendors and suppliers is a burdensome process, which involves also invoicing and contract management.
An advanced e-procurement platform, however, offers tools such as vendor dashboards and contract templates, which in turn you can integrate with accounting and invoicing software you use. These features enable you to engage suppliers proactively by adopting a number of best practices listed below.
- • Take advantage of built-in communication and collaboration tools for proactive communication with vendors
- • Apply specific KPIs to assess vendor performance
- • Generate trust by adopting transparent contract management through customized contract templates
- • Actively seek to create win-win situations which in turn generate trust among your partners and suppliers
Integrating your B2B procurement solution with other online and on-premises business software offers additional opportunities to stay in touch with vendors and suppliers and build strong relationships with your business partners.
To the surprise of business analysts, many businesses do realize the high costs of keeping excessive inventory and still do not take measures to optimize their procurement process.
Decent e-procurement platforms enable you to balance your inventory by taking advantage of data-driven planning and forecasting. You can also connect your procurement solution to software featuring predictive analytics capabilities to get the most out of data about your past purchases and inventory storage times.
Inventory performance indicators you need to analyze and optimize include:
- • How your inventory performs concerning stock replenishment against excess stock
- • Do you over- or under-purchase certain goods or services and what is the reason for such imbalance
- • How to make the procurement process balanced in terms of always having the right quantity of stock in place
- • How to balance purchase requests and synchronize them with your inventory levels
Cost and inventory optimization is key for improving the overall efficiency of your procurement activities.
Improve Contract Management
Fragmented contract management results in not realizing the full potential of e-procurement. Your business can markedly improve contract consistency and eliminate supply chain continuity problems by taking advantage of a central data and contract repository, which is one of the features of enterprise-grade B2B software.
Centralized contract management allows for storing and accessing contracts and related documents in one place and from anywhere. You can also configure automatic notifications that alert your procurement team in case a specific contract can be re-negotiated, improved or optimized for better performance.
Furthermore, you can greatly improve contract performance by utilizing B2B procurement platforms’ features like info on delivery times, pricing fluctuations and compliance with your purchasing strategies.
Implementation of a B2B e-procurement platform is not only about automation and easier access to partners and suppliers. You need to understand that certain efforts should be made on your side to properly optimize your entire procurement process as B2B software can give you data-driven insights and facilitate communication and contract management but it cannot take optimization steps by itself.