The idea of using software for procurement is tied to several successful technological advances in business. From enterprise resource planning to maintenance software and supply chain tools, many of the most valuable digital resources that businesses have are aimed at automating their most important business processes. Since it’s such a valuable process of several businesses, procurement is no exception. With that in mind, eProcurement software would seem a very common-sense approach to purchasing for nearly any kind of business.
However, these days, there’s quite a debate about the obsolescence or continued utility of eProcurement software in today’s business world. Why is this such a controversial element of business automation? The answer lies in examining how businesses have used eProcurement software to date, and how it can efficiently fit into complex IT sourcing architectures.
Find your best-fit eProcurement software in a Procurement Management Product Guide
The Early Promise of eProcurement Software
In the early days of the millennium, eProcurement software was touted as an anticipated business solution. It made sense to suggest that companies were going to flock to replace old catalog purchasing models with brand-new modern eProcurement software strategies. There was a vague sense that eProcurement software was going to be the wave of the future. Oracle aggressively promoted the early adoption of eProcurement software for business, as in this white paper resource from April 2001. Other companies and experts also threw their two cents into the fray, arguing for the vibrant benefits of getting eProcurement software under the hood in a business scenario.
These days, the landscape looks a little different. Many companies have adopted eProcurement software systems, with varying levels of success. Some achieved the touted benefits of automation and efficiency that early eProcurement software promoters hyped. Others had much less success and, in some cases, have had to abandon their eProcurement efforts.
Challenges with eProcurement Software
Experts looking back on the rough road that some companies have traveled have some hints and clues about why eProcurement software may be not be the method of choice for a given enterprise.
One suggestion is that lack of partner buy-in is a compelling obstacle. If suppliers aren’t participating in these types of digital platforms, it can spell trouble for procurement models.
Another big hurdle is choosing from a confusing mix of vendor options and solutions. Cross-compatibility has seemed to be a big issue for the businesses that couldn’t solve the eProcurement puzzle. With so many voices in play, it’s difficult to be diligent in researching any kind of software vendor, and eProcurement software is no exception.
Another argument goes toward the premise that eProcurement software can be difficult to tie to other parts of the architecture. Many businesses consider enterprise resource planning to be the center or hub of a business’ digital toolbox. There’s the urgency of tying eProcurement solutions into ERP, as well as integrating it with CMMS or other maintenance software. When these tasks become less feasible, eProcurement software becomes less desirable to a company.
There’s an additional issue that has bedeviled eProcurement software adopters — the idea that eProcurement systems must be precise in order to offer value. There’s a sense that many companies put eProcurement software in place just to “automate the process of wasting money.” It’s bit of a sarcastic way to put this challenge, but it speaks to the overall difficulty of correctly implementing eProcurement software systems.
Benefits of eProcurement Software Systems
On the other hand, some of the benefits of a good eProcurement tool are evident. Companies can see higher productivity as their procurement processes become easier and more automated. There’s more transparency in spending, which is critical for evaluating cost centers and charting a financial course for the business. In general, eProcurement systems help a company do more with the resources that it has, while scaling more easily.
In some cases, experts argue that the suitability of eProcurement tools depends partly on the nature of the business in question. Some contend that eProcurement software isn’t a great choice for public-sector businesses, partly because they don’t have the agility to be able to properly institute eProcurement.
Another resource goes over some of the specific roadblocks that have kept eProcurement tools from becoming more of a centerpiece of modern business. In “E-Procurement: Myth or Reality?” authors Alexandru Roman and Clifford Mccue go over some of the aspects of eProcurement that have been troublesome:
“Findings of this study suggest that digitized public procurement has not yet led to significant transformative changes,” write the authors. “In fact, for the majority of agencies in this study, the current state of eProcurement is primarily focused on automating existing internal processes and procedures.”
The piece also provides a few other reasons for the failure of eProcurement software:
- Unsuitability of some software platforms
- Resistance to change on the part of adopters
- Inability to plan strategic systems integration
- Lack of professional skill applied to the design process
The bottom line is that if eProcurement software isn’t dead, some companies have tended to put it on life support, or abandon it entirely in favor of some other method. But now isn’t really the time to throw in the towel on any kind of business automation — not when our machine learning and algorithm processes are continually innovating and becoming stronger. Instead, a better idea would be to work toward better tool sets for companies to make sure that they implement eProcurement software correctly. Then they can realize the true power of eProcurement software.