Procurement nightmares caused by poor procurement technology causes a lot of waste. Product waste, time waste, and resource waste are a huge issue in the procurement industry. Though a smaller company might not feel the effects, a large company with multiple departments is seriously affected by missteps from the procurement department. This is the stuff that really adds up in the company’s expenditures in the form of time and money.
By avoiding procurement nightmares, you not only save your employees from frustrating or embarrassing situations, but you also save your company a significant amount of money. Let’s take a look at 3 procurement nightmares that can be avoided by migrating to a dreamy digital eProcurement solution.
Nightmare 1: Inconsistent Supplier Data
Data management is a huge responsibility for the procurement department. Supplier information is kept in silos across the company. Identifying information can vary from platform to platform and may even appear in multiple languages for multinationals. From the enterprise resource program (ERP) to relationship management solutions, business-critical information on vendors and suppliers is hard to access quickly and easily. On top of that, accounts payable (AP) solutions that maintain sensitive financial information are understandably opaque.
With new procurement technology, your company gains a central repository and integration capabilities that facilitate automatic updates system-wide. This kind of technology turns your disparate silos into a data-rich integrated system. When a supplier (or even your own company) goes through a merger, an acquisition, or a divestment, the system recognizes the change and communicate it company-wide.
Nightmare 2: PO Misunderstandings
Misunderstandings are endemic to the procurement industry. Make an error of one single letter and instead of an increased volume of cages, you’ve just broadcast to your supplier an increased volume in wages. When using old processes, the clarification of a mistake like this can really take time and focus away from regular business. Even worse, misunderstandings often lead to compound problems like procurement agreement violations, pricing disagreements, duplicate orders, incompatible products, and plenty of confusion. It’s possible to lose millions of dollars on one procurement dispute.
By digitizing purchase orders, business processes are recorded along the way. Bad information can be corrected quickly and records are always available. This means buyers and suppliers are protected.
Before digital procurement software, the concept of cost optimization was dependent on people. With today’s procurement technology, computer systems can record and track procurement activity with the ultimate goal of implementing smart procurement strategies. By automating data analysis, eProcurement removes the risk of human error and builds intelligence into every process.
Nightmare 3: Brand Inconsistency
Beyond simple operational nightmares, the procurement department can also have adverse effects on overall branding. Though this issue is different in public vs. private sector procurement, brand and government agencies all have a vested interest in upholding the brand. Yet with upstream procurement staffers negotiating contracts and sourcing products separately from the downstream supply chain team, the potential for embarrassing mistakes exists. Imagine the backlash if a corporation or government agency committed to progress accidentally does business with a vendor that doesn’t look good in the media. Customers and key stakeholders could react negatively. It’s the kind of thing that will send you into a PR tailspin—and cleanup operations don’t come cheap.
The accessibility of eProcurement technology offers data transparency that makes this kind of branding inconsistency exponentially less likely to occur. Enhanced internal communication features can even help trans-regional procurement teams execute better research on vendors and ensure that their company values match up to your own.
By now, maybe you’ve seen a common thread between all these nightmares. Inconsistent supplier data, poor internal communication, and brand-related procurement mistakes can all be solved with one simple solution: transparency. A transparent system ensures that procurement processes function with integration, clarity of information, and solid business decisions. A dream eProcurement solution is the single most powerful tool for avoiding these nightmares. Is your company considering a digital migration to end the procurement nightmares? To find out if an eProcurement solution is right for you, contact our solution experts about cloud-hosted eProcurement solution from ProcurePort today.