Ultimate Guide to eProcurement Software

June 8, 2016

What is eProcurement?

Today’s procurement process involves coordinating many different components, such as budgeting, verifying product details, communicating with suppliers, creating competitive supplier agreements or contracts, monitoring order activity, maintaining proper receipt methods and reconciliation, and sending all transactional information to accounting and payments. As organizations struggle to balance these factors, many also face the general and overwhelming problem of simply controlling company spend.

Figure 1: Most Organizations Want Greater Control Over Costs and Supplier Negotiations
“In what area would you like to see the greatest improvement to your procurement process?”

eProcurement Software: Solutions and Benefits

An electronic procurement software solution can integrate the handling of requisitions, POs, goods receipts, and invoices into one system, allowing users to view an entire process within a single interface. This grants them more visibility into process and transactional data, and combined with eProcurement software’s comprehensive reporting tools, allows them to use that data strategically to enhance operations.

A Buyer’s Guide to eProcurement Software

1. Develop a purchasing strategy

Not every eProcurement software solution fits with every organization, as company size, industry, and unique business processes and requirements can greatly affect a solution’s suitability. Companies should develop a sound selection checklist so that they can choose a provider that complements their own internal strategies and business needs. The best solution does not have to be the most sophisticated or costly—it should be the one that reflects an organization’s overall business strategy.

2. Look at a variety of providers

Size should not be the deciding factor in choosing a solution; a smaller solution provider may be able to help with more specific organizational problems than a larger organization due to its smaller team and more personalized customer support. It is also important to explore innovative options—many solutions are taking bold steps to revolutionize their software’s design and techniques in ways that are foreign to professionals more familiar with older solution models. While a solution may sometimes look unfamiliar, the ways in which it could help a company’s performance can be just as groundbreaking as its new layout.

3. Look at the numbers

Organizations should consider the total cost of ownership for the solution, which includes implementation and integration costs, change management costs, ease of use, and its scalability. They should compare these costs against the potential
savings they will gain by reining in maverick spend, reducing processing times, and speeding up payments. To help calculate the total cost of ownership (TCO), PayStream has created an easy-to-use TCO calculator that can be accessed via the PayStream Advisors website. This tool is free to use, and can help an organization decide which model is the most cost-effective for their needs.

4. Build an internal change movement

For an automation overhaul to reach full success, especially with eProcurement software, the entire organization must be in agreement about the value, need, and primary use of the software. Although it is important that procurement, AR, and AP professionals be on board—as they will have the most contact with the software— it is vital that senior management also be optimistic and enthusiastic about the new system. Gaining corporate buy-in is the surest way of creating a successful automation initiative.

For more information, check out the full 2015 eProcurement Report: Strategizing Spend With eProcurement Software.