At first glance, the procurement process appears to be a simple, straightforward procedure. Some people think that the procurement process only includes identifying the needed goods, receiving the order and pay.
Procurement processes, however, just like all key business functions, is a multi-staged, layered process. Each of the stages must be well-managed in order to meet procurement objectives, which involve getting the best value for money in all procurement activities. Since the process is extensive and involves many factors, it is easily misunderstood by many managers in the company.
How can a simple process look so complicated? Read on and we hope that you will gain a better understanding of the stages in procurement processes and also the differences between manual and digital procurement.
To keep the procurement management process fair, transparent and efficient, a good understanding of the procurement process flow is key. The flowchart below sums up the important steps in a procurement process.
Procurement offices, department heads, functional managers
Procurement, departmental heads, requester
Procurement, departmental heads, requester
Requisitioners, vendors and procurement
Since late 2015, procurement has gone through significant changes. It evolved from a tactical function to a digitalised, strategic process. In the traditional way of procurement, the work was handled manually, relying heavily on Excel sheets, paperwork, as well as emails and phone calls to engage with the supplier.
Papers are printed out by several parties and filed away for the needs of a particular functional team and used for approval purposes. This kind of approach is both time-consuming and costly where it is more prone to errors and loss of paperwork. Thus, running procurement in a traditional way is like travelling on a horse cart in 2021.
The objective of this traditional approach was simply to acquire the right amount of goods and services at the right price and time. If we look at procurement only as a short-term purchasing mechanism rather than an essential component of business operations, we may possibly overlook the value of what a strategic approach can offer. Manual procurement undermines the operations and financial performance potential of an organisation, working on small and repetitive tasks that failed to generate savings or profit. These tasks could be anything from approvals, writing RFxs contracts, negotiations and discussions of bids.
If you are facing the issue that we mentioned above, it is time for you to move the procurement processes to a single, digital platform. Know why? Because it streamlines and speeds up all source-to-pay activities, creating opportunities to generate more value and savings. Switching to e-Procurement might just have your people and the environment thanking you. Thus, we have listed the differences between traditional and digital procurement for you to have a better picture of how e-Procurement works.
Since the pandemic, businesses are transforming and adapting to the technological world. So, it is time for you to consider an e-Procurement system that will allow you to get more done in less time.
Here are the top five benefits to move to an e-Procurement system.
Now that you know why more and more businesses are adopting an e-Procurement system, you might find it difficult to measure the effectiveness of your procurement process. Fret not, we have listed down the ways to evaluate a good procurement process.
Digital procurement, also known as e-Procurement, is transforming B2B procurement by automating the buying process and assisting businesses and vendors in delivering better outcomes. The implementation of e-Procurement software has reduced the cost of each step in the procurement cycle while increasing efficiency.
The global nature of procurement was clearly displayed when the Covid-19 outbreak in the whole world. The entire world was thrown into chaos when the lockdown was implemented. But with ADAM, you are able to create a dynamic procurement management process that provides you with a tactical advantage. In the time of Covid-19, we would like to be with you to overcome all these challenges in procurement.
Want to know more about e-Procurement and how to respond to the challenges this pandemic has presented? Find more information about this here.
What is procurement?
Procurement is the process of sourcing, selecting and acquiring the goods and services a company requires from the vendor through direct purchase, competitive bidding or tendering process to fulfil its business objectives.
What are the 7 stages of procurement?
What is the procurement process flow?
The procurement process flow is a skeletal structure that describes how purchasing and procurement take place or is done within a company Generally, the procurement process flow includes the above 7 stages.
What is the procurement life cycle?
The procurement cycle defines the step-by-step process for determining a company’s need to acquire a product or contract.