Benefits of E-Procurement
Electronic procurement, also called E-procurement, refers to a purchasing system that is internet based and automated. It is usually used by companies to receive services and goods at a less costly and faster rate. The many benefits of using electronic procurement in business have resulted to the increase in the amount of companies that are implementing such electronic systems.
1. Lower costs
E-procurement removes rework, errors and paperwork. All these factors result in a lower cost of operating a business or organization . Furthermore, electronic procurement results in better supplier relationships. It uses system developments to lessen external spend, whilst enhancing supplier quantity and performance.
2. Better visibility
With E-procurement, all transactions are centralized and this provides a better view of how finances are used within the organization. It enables in depth reporting on items purchased, payments made, requisitions and orders processes. This great visibility also extends to making certain that the organization complies with established and existing contracts.
3. Enhanced productivity
Customers can easily get their desired items from a list of already approved items by using an online ordering and requisition system. This means that the normal procurement employees do not need to process the orders manually and thus they can do other duties. E-procurement therefore improves productivity as procurement workers can concentrate on doing other important duties such as marketing.
4. Better control
E-procurement leads to better control of the organization as the decisions are easily made. This is made possible by the central organization of data and presence of time stamps. Additionally, standardized process of approval and a formal workflow ensures that the same degree of control is applied onto every transaction. Compliance to regulations is also improved with E-procurement.
Last but not least, instant placement of orders with E-procurement can also reduce the shipping time significantly.