The last two decades have seen immense changes in business processes occasioned by the inception of information technology. There are many business organizations that have made the shift from a manual to digital system in line with these advancements. Those that have made this shift effectively continue to reap substantially. Application of technology is not only limited to profit generating tasks but however it can be adopted in almost every section of an organization. One sector that has been singled out as laden with inefficiencies is the procurement department. Traditional procurement processes are dens of wastefulness that can only be appropriately remedied by adopting e-procurement services.
Eradicating inefficiencies
Those organizations that have not adopted e-procurement services often exhibit profligacy emanating from a number of sources. A proper e-procurement system ensures all the goods are sourced from approved suppliers whose list is agreed upon after careful negotiations. Without such a system, the organization stands to lose a lot as there is no proper vetting of suppliers or any agreement regarding the set prices. E-procurement also reduces the purchase cycle time as all outstanding issues are usually pre-agreed and hence there is no need for secondary and wasteful logistics processes.
Major benefits
Proper implementation of e-procurement services ensures the creation of effective controls that check on an organization’s spending. Existing studies have shown that close to thirty percent of the budget allocated to procurement departments is taken up by administrative expenses rather than the real physical purchasing of goods. Such a system also facilitates accounting eliminating any instances of fraud and unnecessary errors as all the relevant documents are easily scrutinized to ensure consistency. It also eases record keeping and retrieval of data. This data is crucial and can be used by the executives to make timely and accurate decisions on procurement. The process of stocktaking is also eased and there is a likelihood of more accurate figures which will reflect eventually in the final financial reports of the company.
Importance
The importance of e-procurement services cannot be gainsaid. Not only is this a crucial business move from manual to a modern system but it also helps remove some of the inherent inadequacies and wastefulness that characterizes the traditional method.
