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Finding the right e-procurement strategy for your business

29 Lokakuu 2020

Kirjoittanut: Toni Pihamaa

E-procurement has become the new hero of business, so how do you get the whole company committed to the plan? Here’s how to align your e-procurement strategy with your overall business plan and get everyone on board.

What is e-procurement?

Procurement, or the search for goods and services according to pre-determined terms and agreements, is a crucial part of everyday business. A well-defined procurement plan helps business owners fulfil their goals and targets according to the overall company strategy.

E-procurement is a modern approach to sourcing and acquiring goods using technology to connect buyers and suppliers across industries and geographical markets. Trading partners connect and communicate electronically via digital platforms and messaging systems. Every stage of e-procurement is digital and automated for faster searching and requisition, more secure document management and storage, and clearer oversight and control of transactions.

Challenges in procurement

Many companies do not have a fully thought-out procurement process. It’s often left up to individual departments or employees to decide which goods to purchase and from where. Without a companywide buying strategy based on pre-negotiated agreements, maverick spending becomes a costly problem for the company.

Companies that do have procurement departments also face the challenge of being seen as a roadblock to decision making. They can appear to make everyday tasks bureaucratic and cumbersome with a single goal: negotiating the best deal with suppliers. This is not always the best way to bring value to the company as a whole.

So what’s the best way to align procurement with your overall business tactics? An e-procurement strategy is something all businesses, regardless of size or industry, can implement for companywide savings, efficiency and collaboration.

Building the case for an e-procurement strategy

For e-procurement to become a shared initiative, the procurement department or representatives need to lobby and promote the cause. You have to present a proper and convincing case to the company. Show that you are not an autonomous, price-cutting rogue, but a trusted procurement advisor whose goal is to elevate the entire organisation.

Become the spokesperson for e-procurement inside your company. Here are several ways to do that:

Ensure all business owners and departments know your digital agenda and how it helps them reach their targets. Getting everyone on board from the top down is crucial for successful execution.
Make sure they understand the value you are providing for them to make their business more profitable. Present a plan that shows the short and long-term benefits e-procurement will have on the business.
Let the business know that you have new digital tools to streamline communication with your suppliers. Demonstrate the positive impact streamlined processes have on building trusting, longer-lasting partnerships.
Clarify that this is a symbiosis for internal and external parties alike. E-procurement gives your company real-time visibility and oversight; suppliers can automate sales and establish quicker payment methods.

Profitting from e-procurement data

Data is one of the most valuable resources you can harvest from implementing an e-procurement strategy. It is with historical transaction data that businesses get a better grasp of company spend; through real-time access to data, you can make both faster and more informed business decisions. With correct data, sourcing and renewing agreements with suppliers becomes a much easier process.

Easy access to historical data comparisons shows you what has been procured and at what cost, putting you in a much better position when negotiating with your suppliers.

A value proposition no one can deny

Putting an e-procurement strategy in place is a historically hard sell when it comes to getting the whole company to commit. However, clearly demonstrating the advantages of new tools like modern procurement systems and digital networks with ready communication channels increases your chances of succeeding.

Automating the process from end to end frees resources to do more meaningful tasks that the company never previously had time for. Allocate time to set up these new tools and processes throughout the whole organisation. With proper time and resources, the new e-procurement process could become the next significant asset for not only your business, but all your trade partners as well. The proof will come quickly, easily visualised in your company’s bottom line.