Procurement has attained greater significance in the wake of globalization. The hypercompetitive business environment and the volatile market have all made it necessary for enterprises to look at procurement or purchasing process at a different level. Gone are the days when procurement process was considered as just one of the components of multinational organizations. Today it plays an important role in the success of business enterprises.
Procurement is the acquisition of right goods or services at the right price, on right time and from the right source. Procurement process attains significance especially during those times when commodities are scarce and prices very high. Under these conditions, the performance of any enterprise depends largely on its purchasing decisions. When making cost benefit analysis, if the outcome of their purchasing decisions is increased benefits when compared to costs then those decisions are definitely the right ones.
Going by the traditional procurement process, companies have to deal with the administrative costs, which sometimes would be greater than the cost of the items purchased. Purchasing costs can often be as high as 50% of a companys total costs. In such a scenario, just imagine what the administrative costs of purchasing would be. Hence, companies need to make strategic decisions to mitigate the additional costs. The most apt way of achieving it is to automate the procurement process. eProcurement helps to automate the procurement workflow end-to-end, from the order fulfillment to the delivery and invoicing. Since the manual steps are configured, it helps to get rid of authorization procedures, invoice submissions, and other communication methods. Such a move not only helps to enhance the organizational efficiency but also reduces the administrative cost of all steps in the procurement process. The following are some of the notable benefits of eProcurement.
Simplifies and accelerates price list administration
Creates and maintains detailed delivery reports based on the original order, order confirmation, dispatch advice, and manual entry when the goods have been received
End-to-end display of all procurement transactions
Highly automated and configurable invoicing
Processes electronic invoices of any type or format such as order based, periodic, scanned and so on
Examines and verifies automatically the accuracy of invoices, including article-level matching and matching with the relevant contract
Fully automated approval process
Better price control and comparison
Improved compliance to master agreements/contracts
eProcurement thus provides companies and enterprises complete control over procurement activities at all levels.
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