Procurement Software Buyer's Guide
How to Select a Process-enabling eProcurement System
By Kelly Barner, Owner/Managing Director, Buyers Meeting Point, Director of Intelligence, Palambridge
Having an eProcurement system in place is absolutely critical for efficient, consistent support of the B2B purchasing value chain - especially in an age of increased digitalization. Although today’s procurement technology is highly modular and (in most cases) is designed to integrate with technology from other providers, defining precisely what each company needs from eProcurement in terms of functionality and governance will make the evaluation and selection process far more objective.
In this buying guide, we will address:
- The benefits of eProcurement systems
- Key features
- Process considerations
- Additional opportunities
Benefits of eProcurement solutions
The primary benefit of having an eProcurement system is that it serves as ‘a single source of truth’ regarding spend, contracts, suppliers, and items available for purchase. In an age when individual consumers are highly empowered to evaluate options and make online purchases in their personal lives, corporate procurement organizations must be prepared to make enterprise buying just as frictionless and convenient if they hope to channel purchases for the sake of management and measurement.
The following benefits are commonly attributed to well selected and implemented eProcurement solutions:
- Increased savings (by as much as 4-6% according to CapGemini)
- Improved compliance
- Centralized spend visibility
- Efficient distributed buying
- Improved supplier management
The features listed below are less individual system capabilities than they are potential boundaries of the eProcurement system’s footprint. Many providers offer all of the following functionality, albeit at different levels of maturity and proficiency, while some specialize in offering a subset. Even when companies do offer a broad range of functionality, it is wise to investigate whether they are fully integrated to the code level or were consolidated under one brand and interface through acquisition of point solutions.
Start by considering the entire procurement value chain at your company – including any solutions currently in place – to determine the process scope that will be managed as part of the eProcurement system v. those that will require integration.
Platform: The broadest possible approach to procurement technology is to bring in an entire platform. This involves multiple procurement functionalities and one underlying level of technology, all of which share a native code base, user interface, and core data set. The platform may extend from spend analysis through sourcing to contract management, and then proceed downstream to distributed buying support, supplier performance management, and accounts payable.
Spend Analysis and Sourcing: At the beginning of the procurement value chain are spend analysis, used to understand how much of what has been purchased by whom and from whom in the past, and sourcing, which is used to evaluate and compare providers of the same product/service before selecting one or more for contract. Sourcing is the one point in the procurement value chain where non-contracted suppliers will interact with the company and their technology. There should be a registration process that allows them to participate in an RFx without being added to the full database of suppliers under contract.
Contract management: Once an award decision is made, contract terms and language must be finalized and signed by both parties. Contract management functionality may include redlining (legal revisions with tracking) and electronic signature or simply the storage of terms and expiration so they can be centrally managed and enforced over the term of the agreement. The legal team should be involved in setting functionality expectations. This will ensure that eProcurement meets their needs without paying for functionality that they are not comfortable using.
Catalog buying: This component of eProcurement functionality is often considered to be its entire purpose, since this is the primary touchpoint for the majority of the organization. Procurement is able to specify suppliers for the purchases that others in the organization will make. In some cases, suppliers will provide entire ‘punchout’ catalogs that leverage their own detailed item information and reflect the specifications and prices under contract with the enterprise.
Contingent Workforce: This specialized functionality is used by enterprises that leverage a significant amount of third party services to fuel the operation. No longer limited to the services associated with the term ‘temporary labor’ access to and management of spend with a flexible external workforce is increasingly managed similar to product purchases. Human resources should be invited to play a part in evaluating capabilities and establishing requirements.
Enterprise Resource Planning (ERP): While ERP systems are not part of eProcurement (it is rather the other way around) the three largest players in the procurement technology market – SAP, Oracle, and IBM – are better known for their ERP systems. If both systems are to function side by side in compliment to each other, the company will have to differentiate which spend and purchases are managed through the ERP system and which will flow through eProcurement.
While eProcurement is a technology-based resource, there are related process considerations that will affect the system’s level of success.
Oversight and governance: In order to achieve the ‘single source of truth’ objective with eProcurement, the company must get a majority of purchasing transactions to flow through it. Non-compliance (also commonly known as ‘maverick’ spend) is a challenge that plagues every procurement team with an established process. The strength of the enterprise mandate for using eProcurement can be supported by the solution itself, making use of restrictive features or allowing access to more choices. This should be informed by a cultural, not technical, conversation with company leadership.
Supplier Relationships: Although the primary stakeholders for eProcurement are procurement and enterprise buyers, suppliers deserve consideration as well. Evaluating potential solutions for their user friendliness towards all parties will improve the implementation process and long-term ROI. Specific considerations include whether it is possible for suppliers to easily manage multiple customer needs from one login and with one data set as well as the complexity of uploading and altering online catalogs.
Data integration: As mentioned previously in the section on single platform eProcurement, continuity of data from one area of functionality to another is the primary source of its intended value. If a platform is not in use, integration is easier than ever – as long as there is continuity throughout the procurement value chain. Sourcing, contracts, and purchasing can function very well in isolation, but the savings and oversight potential is tightly coupled with procurement’s ability to connect the data – and therefore the activities – conducted in each one.
When eProcurement systems are being evaluated, there are minimum requirements that must be satisfied, but then there are additional opportunities to add value. Depending on the relative comfort with fundamental functionality, procurement should also consider the following:
Third party data enrichment: Although individual companies can contract out for additional data about their suppliers, being able to select from a list of third party enrichment sources that already have experience working with the eProcurement provider is an advantage. Examples of enrichment include ‘flags’ for diversity suppliers, terrorist watchlist suppliers, and suppliers at high risk due to legal activity or financial instability. This enrichment is most likely to be applied in the spend analysis and Supplier Information Management (SIM) portions of eProcurement.
Marketplace functionality: Most companies are focused on making their own data accessible with an eProcurement implementation, but there are significant efficiency gains to be claimed with access to the knowledge and information of their industry peers. Some eProcurement solution providers offer access to marketplaces of suppliers that extend beyond the organizations any one of their suppliers currently have in their supplier master. This resource can shorten the time between the identification of a product or service need and a contract or can serve as a backup plan in response to supply chain disruption. Evaluate the number of suppliers available, the information in their profiles, the process of validation, and the industries they represent.
Mobile accessibility: Depending on your company’s business and the routine of the people who will be using the eProcurement system, being able to access it remotely via a smartphone or tablet may be important. Speak with those who will make the most frequent use of remote access to determine what functionality they will need. For instance, will they be making purchases, accessing supplier contact information, or approving the purchase requests of others? Only the most user friendly interface and login process should be accepted.
Each company has unique requirements and a unique history with procurement technology that should be considered when evaluating eProcurement solutions for the first time or to enable an upgrade. The above points should be considered general guidelines for requirements setting discussions internally and with potential providers.
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FinancialForce Financial Management can accommodate the most diverse and complex financial needs. The perfect complement to Salesforce CRM, it brings back office data to the front, allowing companies to align sales, services and finance on a single cloud. It includes advances like a single ledger design and a multidimensional chart of accounts, which give you real-time business intelligence and help shorten period close cycles.
Prokuria is a procurement automation platform that enables procurement departments and top management to organize all their RFPs and e-Auctions with suppliers in one place. It's designed for the companies who need better control over the procurement process and achieve cost savings.
Verian’s purchasing software makes your purchasing more efficient and effective by automating all of your spending, regardless of commodity, approval process, or supplier. That includes requisition, approvals, buying, receipt, reconciliation, and reporting. All catalog and non-catalog requisitioning is done through a Web-based interface with the look and feel of common online retail shopping sites, making the process intuitive and simple for employees at all levels.
Procurify is an online procurement solution for Small to Medium enterprises. Our product integrates from the top down, allowing visibility into employee spending from all levels of the organization. Procurify is an evolution of procurement software.With easy-to-use features, you get all the cost management capabilities you need to save on spendings.
Coupa’s cloud procurement software application is a powerful procure-to-pay system that brings consumer e-commerce shopping ease and bottleneck-busting functionality to the procurement workflow. Our procurement software can handle transactions in multiple currencies and languages so you can run a global operation using Coupa.
The Ivalua Buyer Contract Management solution was designed to solve these problems. It provides a clear and structured framework that brings together all contracts in a single repository. It also manages the entire lifecycle of a contract, from the drafting and collaborative authoring to the creation of amendments.
Bid eXchange is an integrated procurement system for supplier management, e-sourcing, and contract management. Give your procurement team the software tools for strategic sourcing to drive process efficiency and cost savings throughout the organization. The eBid eXchange eprocurement platform is an easy-to-use, affordable, and customizable software-as-a-service solution used by large and small businesses and government procurement organizations.
b-pack simplifies your procurement and speeds up processing time between purchasing requests, approvals, and purchase orders.Our eProcurement offer is easy to integrate with any ERP or financial system. b-pack can answer your business requirements using flexible solutions that are easy to use and implement, leading to quick return on investment.
The e-procurement suite is composed of 5 modules that allow the management of different stages of the procurement process: from importing supplier catalogs to invoice processing, including purchase requisitions management, purchase orders and deliveries. The user has a single entry point to the application to issue a purchase request for listed or unlisted products, or for the procurement of services.
Puridiom provides the most comprehensive eProcurement solutions to automate, analyze, and track trends in purchasing to control and minimize maverick purchases. Easy-to-use tools enable users to complete tasks with greater visibility and cost efficiency. Puridiom provides the solutions to your procurement problems. From front end requisition and approval workflows, to comprehensive procure-to-pay solutions.
Zycus iSource provides simple solutions to challenges at all stages of the sourcing process. Zycus iSource simplifies the event modeling process: Features drag and drop item definition with one, click transfer of data to and from electronic spreadsheets, allows 3,000+ items per sourcing event and enables full customization and modeling of complex item, service cost breakdowns, and many other powerful features and benefits.
Contract Management will help you automate the tracking and organization of your contracts, enabling you to quickly manage the right contract at the right time. With a library of contract types at your disposal, your users can create contract records in minutes and store the physical contracts within those same records. Macro and micro triggers give you the flexibility to manage your database, and saved searches put the right contracts on your personal dashboard for easy management.
SciQuest Contract Director, a contract management software solution, is designed to improve the contracting process and sets the standard for enterprise contract management best practices. Recognized by industry analysts, Forrester Research, in June 2011 as the highest-rated contract lifecycle management solution, SciQuest Contract Director enables users to manage the complete contract life-cycle online
Aestiva Procurement is procurement, automated your way. Aestiva's Enterprise Procurement Systems have low-IT overhead and can be deployed quickly. Our "simple-is-better" design philosophy matches well with the goals of Aestiva's enterprise customers. This procurement system may be extended with a wide variety of procurement software add-ons and procurement software extensions.
ProContractorMX provides a robust toolset for the pricing, ordering, and tracking of goods, so you can manage procurement efficiently, minimize costs, and maximize purchasing power.Easily and electronically create purchase orders for any project or change order from estimate. Select and sort items, and customize POs to suit your needs.
SpendMap is a cost-effective software system for midsize and larger organizations that need to automate and streamline their Purchasing, Payables and/or Materials Management processes. Available as hosted (SaaS) solution or as traditional on-premise software, this 100% browser-based system is robust, fault-tolerant and easy to deploy to a large user community.
PurchaseSoft has designed solutions that let you gain control over your business's procurement process - from requisition to receiving. From day one, you'll be able to consolidate orders, negotiate better prices, manage inventory more effectively, track assets and more, in real time.
Passport® Legal Spend Management is part of Datacert’s suite of industry-leading solutions for enterprise legal management. With more than 400 completed implementations for its extensive base of Fortune and Global Fortune 500 clients, Datacert has unparalleled e-billing and legal spend management experience and best practices expertise.
BAZ on the enterprise data bus should be an imperative solution for all leading process oriented organizations. Use of BAZ, increases efficiencies in financial productivity, data integrity, policy-change-risk management, transaction transparency. Can integrate with any ERP and extend ERP framework to the bottom of the pyramid (thus connecting all within an organization in the spend space). All this results in cost optimization, compliance with reduced risks and better controls
Intelligent, intuitive procurement software from GEP is helping procurement teams worldwide boost productivity, eliminate processing snarls, slash turnaround times and save money. Cloud-based GEP Suite 5.0 is a comprehensive eProcurement platform that automates and streamlines key procurement and purchasing-related work processes.
Ivalua Buyer’s e-sourcing solution provides end to end collaborative management of the different stages of the sourcing process: from the requirement gathering to contract, including the identification of suppliers and the management of RFPs and bids.
Partner with the RealPage Strategic Purchasing Advisory Services team to help ensure you are realizing the full savings and revenue opportunities of your purchasing program. We bring to the table more than 30 years of multifamily experience in strategic sourcing, spend management and benchmarking best practices. Using our experience, open communication, and a partnership approach we get actively involved in your business operations to help you successfully execute your purchasing program regardless of the spend management platform you use; or we can help you design a purchasing program if you don't currently have one.
The world's best-run businesses know that accurate, validated and complete Third Party information and best-practice processes are essential to drive efficient relationship management, manage risk, and ensure compliance across distributed, global networks of suppliers, affiliates, contractors, resellers, brokers, and other Third Parties. Aravo was purpose-built to meet this need.
Procurement Technology and Services For B2B BuyersOur growing network of over one million businesses – including our sourcing, procurement and invoicing solutions – eliminate the hurdles to productive business commerce, enabling buyers to source smarter, buy smarter, and pay smarter. With Hubwoo, you can bring 100% of your qualified suppliers online, achieve 100% contract-compliant requisitioning, and dramatically reduce inefficiencies in your accounts payable process.
The Tradeshift platform is an all-in-one e-business solution for companies around the globe. Apps, like e-invoicing, allow organizations of any size to bring business processes online. But that is just the beginning. Tradeshift is on a mission to connect every business on the planet. And we are well on our way.
The IBM® Emptoris® Contract Management family helps companies structure more profitable contracts, streamline the contracting process and improve compliance. These solutions can automate and manage various stages of the contract lifecycle from creation, execution and renegotiation of contracts and amendments, through performance monitoring, analysis and renewal. The IBM Contract Management family enables companies to capture more revenue opportunities; improve supplier, partner and vendor relationships; and mitigate risks.
BravoSolution offers powerful tools and solutions for every aspect of supply management. Spend analysis, eSourcing, Supplier Performance Management and Contract Management Software and Services. Collaborative Sourcing, Strategic Services, Adoption Services, Government Solutions.
Perfect Commerce offers a complete spend management solution set consisting of software and services that address a wide range of industry challenges. At any point in the spend management process, our proven, reliable, end-to-end platform provides our customers with the solutions they need to solve even the most complex challenges.
Across our range of solutions you can extend the value of your IT asset data even further with seamless integration into other key ITSM functions such as: ITIL Problem management, ITIL Incident management, ITIL change management, software asset management, and CMDB. Integrate with a full range of IT operations management solutions. You can choose a level of capability that meets the requirements of your organization: from a simple Asset Inventory solution through to full Asset Lifecycle Management
Flycast Partners provides IT Service Management consulting and implementation services to organizations across North America. Our clients remain ahead of the curve on technology adoption while maintaining the rock-solid principles of ITIL in practical, focused projects.
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