As procurement teams play increasingly important roles in organizational strategies and growth, technology is becoming an important enabler for electronics buyers. As platforms that help companies automate their complete source-to-pay cycles, procurement software provides an array of benefits that can’t be achieved with manual processes and/or spreadsheets.
In helping buyers manage contracts, analyze spend, and get better control over the procurement process, procurement software automates functions like PO creation and verification; electronic PO submissions to suppliers; order confirmations; inventory management; data collection and trend analysis; and other tasks.
“Under a traditional system, this process is completed manually. Using procurement software, on the other hand, allows a great deal of the process to be automated, and all of the process is electronic,” spend managed system provider Purchase Control points out. “This saves time and reduces error potential, thereby saving the organization money.”
These and other benefits have caught the attention of procurement departments across numerous industries. “Anyone who has paid even the slightest bit of attention to the progression of global industry in recent years has noticed two inescapable facts: First, software has had an irreversible influence on virtually every business sector,” Fairmarkit’s Tarek Alaruri writes in “What’s Behind the Growth of the Procurement Software Industry?” “Second, everyone from the traditional players within the cloud-based service industry to newcomers involved in the SaaS [software as a service] marketplace appears to have ridden the software boom to unprecedented heights.”
A Thriving Market
In a look at how the “Procurement Software Market is Thriving Worldwide”, Report Ocean says that as more companies strive to automate product inventory administration, procurement software is becoming more and more important. Between 2018 and 2023, the procurement software market is expected to post a compound annual growth rate (CAGR) of 10.1%.
Segmented on the basis of its deployment, software type, organization size, and vertical and regional demand, the procurement software market includes both on-premise and cloud-based solutions. Those platforms handle spend analysis, e-procurement, supplier management, e-sourcing, contract management, and other functionalities. Key users include the automotive, retail, IT & telecom, travel & logistics, electronics, and mining industries.
In another market report, Kenneth Research note that procurement software automates the whole buying process—from the purchasing to the management of the inventory. “The advantage of using the procurement software is that it reduces the external cost associated with the process and also enhances process efficiencies,” the firm points out, noting that the global procurement software market is observing “vibrant growth” right now thanks to companies’ desire to automate and streamline their sales channels. “The increasing need to improve the supply chain [will] be the major driver for the overall procurement software market.”
When shopping for procurement software, Purchase Control says companies should look for these six qualities:
- User-friendly operations. Make sure it’s user-friendly and intuitive enough to make training your team easy. If you find they struggle with any elements in the process, it will be frustrating for everyone.
- Budget data. Everyone should have real-time access to their current budget. Including budget data in the system also allows for easier and more accurate spend analysis to take place, so you’re always sure about what money is going where.
- Automated approval workflow. Choose an e-procurement solution that will make it easy to set parameters for approval based on spending and budget limitation by individual and/or department—to automate the approval process without human intervention.
- Real-time updates. When the automation is set up correctly, no one has to worry about where a purchase requisition, purchase order, or invoice needs to go.
- Mobile access. Make sure your procurement software includes remote access abilities for mobile devices, for anyone in the organization with permission-based access.
- Speed and flexibility. The software should ideally be fully deployed within a month—with all the flexibility your organization requires.