13 ways sustainable sourcing and procurement drive ESG efforts
The strategic sourcing process is a cycle, so it cannot be done once and forgotten about. A cycle approach to […]
Procurement 101
Reading time:
Written by
Majdi Sleimen
Chances are high that if you’re in business (and successful), you and your team purchase things on a regular basis to keep things running smoothly. Whether it’s office supplies, travelling to different locations, components needed to make a product, or initiating subscriptions to new online tools, procurement plays a critical role in every industry.
But if “procurement” is used to describe the process that businesses use to purchase these things, then what is e-procurement?
E-procurement is a term used to refer to the digitization and mobilization of traditional procurement process flows, operations, documentation, and best practices in the form of procurement software - also referred to as an e-procurement system.
But perhaps we’re jumping the gun a bit by talking about e-procurement first!
To really define and understand what e-procurement is, understanding what goes into a traditional procurement procedure is a must.
There are two main aspects to consider when defining procurement:
The act of procurement itself refers to purchasing operational goods and services (typically a B2B or “Business to Business” transaction) that an organization requires to operate efficiently and profitably.
Simple, right?
What’s not so simple is the process used to execute that action.
As a matter of fact, the whole reason that procurement exists as a profession is because of its diverse and complicated nature!
However, for the sake of brevity (“quick and simple” wouldn’t be able to cover all of the different processes companies use) it’s worth knowing what a standard business procurement process may typically involve.
Not every business has an identical procurement process workflow. Depending on the nature of the goods and services that need to be purchased, the process may become more or less complicated.
For example, a procurement process for a business in the medical industry would require a far more extensive evaluation process than, say, a business that only needs to order office supplies once in a while.
However, an overview of what steps a complete procurement process involves might look something like this:
Alright! I know what you’re thinking:
“The title said simple and quick explanation - I’ve been bamboozled!”
The procurement process itself can seem overwhelmingly complex at first glance.
However, understanding what e-procurement means with this context is far less complicated.
Here’s the real “quick and simple” part of understanding e-procurement.
An e-procurement system is designed to streamline all of the planning, operations, and required documentation that goes into maintaining an effective procurement process.
This means that the huge list of bullet points above is centralized on a single software platform - making it possible to track the actions, documents, and numbers associated with every aspect of such a complicated process.
In turn, workflow agility is increased, planning becomes more structured, and access to accurate spending insights to make informed decisions and form data-driven growth strategies.
Here’s a comprehensive list of the top 20 benefits of e-procurement systems if you’d like to see a breakdown of what other advantages a software platform provides to procurement professionals.
In short, e-procurement is a way of taking a very complicated purchasing process, and streamlining it through a single digital platform to ensure the business has complete control over their operational expenditures. If you're ready to transition to digital procurement processes, be sure to avoid these obstacles to making a digital transformation.
Create a free account or request a live demo