The procurement process for hospitals is quite complex compared to other industries with shorter and less regulated supply chains. Hospitals need to pay attention to regulations, prices, logistics, and other variables in their procurement processes. The number of items and services that need sourcing are many too. Relying on spreadsheets is ineffective because there is not enough visibility or accountability. An e-sourcing software gives immense power to the procurement team. To break this down further, here are 6 ways hospitals can benefit from e-sourcing software.
Improved Supply Chain Visibility
Hospitals’ supply chains are complex. Surgical equipment, beddings, drugs, dressing materials, cleaning and catering services, security, software and hardware, stationery, and many other items need to be bought. The industries that supply these products are constantly evolving with improvements happening, prices changing, and even regulations. Hospitals need to monitor these industries to control their costs, maintain ample stock levels, and plan.
An e-sourcing software helps by providing a single point of access to necessary supply chain data. Such visibility is important for planning and improvement. For instance, if a certain supplier is constantly lagging with their deliveries, that may be grounds to cancel their contract and work with another supplier. If certain suppliers account for the bulk of a hospital’s spending, the hospital may be able to use that information to negotiate better terms. Having an up-to-date repository of suppliers is crucial for flexibility.
Reduced Procurement Costs
With e-sourcing, hospitals can attempt different bidding approaches for suppliers to compete on prices. By conducting e-auctions for qualified suppliers, the hospital may deliver significant savings on their spending especially on services.
E-sourcing also speeds up the entire procurement process because invites to tender can be sent out electronically. The applications are also sent in real-time. E-sourcing software enables the creation of templates to send out a communication to vendors, which saves a lot of man-hours. Eliminating unnecessary paperwork also results in tangible savings in stationery costs.
Better Supplier Relations
Transparency brought about by relying on e-sourcing software has a positive impact on supplier relations. The system provides a portal from where suppliers can view the available opportunities, application deadlines, current statuses, and to whom the tenders are finally awarded. Suppliers will, therefore, know that the hospital awards tenders through a meritocracy system.
The platform also enables smooth correspondence between the hospital and its vendors. Suppliers are always in the loop about the status of various opportunities they applied for. E-sourcing also eliminates the geographical and size barriers between suppliers and hospitals. Smaller companies can compete for the same opportunities with bigger companies without feeling like they don’t stand any chance of winning.
Ensuring Compliance with Laws
A major benefit of e-sourcing is how easy it makes it to comply with hospital procurement laws. For instance, suppliers will need to provide accreditation to access the various opportunities available to apply for. There are alerts when accreditation for suppliers is not renewed or gets canceled for whatever reason.
Part of procurement compliance is being able to prove that a competitive process occurred before a contract was awarded. With e-sourcing, the hospital maintains a record of invitations, applications, correspondence, and awards to various suppliers. Opportunities for underhand dealings are minimized and suppliers are forced to compete on a value basis.
Audit processes are also quite easier when proper records have been maintained.
E-sourcing Enables there to be Proper Internal Controls
An e-sourcing software assigns clear responsibility for every aspect of the procurement processes. It’s very clear which persons internally are involved in the approval of orders, invoices, supplier lists, and so on. Therefore, if questions arise regarding a particular order or contract, it’s easy to go back and audit the approval process.
This feature of e-sourcing eliminates grey areas regarding internal accountability. Internal controls also minimize the chances of one person within the hospital setup influencing spending in their favor. All parties supposed to approve a purchase requisition, for instance, must do so before it goes out to suppliers.
Automation Opportunities
Using e-sourcing software creates opportunities for companies to automate various functions of their workflow. Automation can reduce human error while also allowing staff to focus on high-level and more important tasks.
For instance, it’s possible to set up a central location where relevant news regarding developments in the healthcare industry gets aggregated for the procurement team’s consideration. It’s also possible to automatically send out invitations to qualified suppliers once an order is approved internally. Incoming communication can be routed to the relevant person’s in-tray. If the status of pending tender changes, the relevant parties can get notified automatically. All these can be set up using no-code automation tools available in the market today.
Getting E-Sourcing Right for Hospitals
As seen, implementing e-sourcing in hospitals not only saves money but also creates opportunities to grow value through spend analysis. By being able to see areas that take up big chunks of the procurement budget, the company can negotiate favorable terms from suppliers. E-sourcing creates transparency in the procurement process thus also benefiting a company’s relationship with its suppliers. For hospitals, e-sourcing makes it easier to comply with regulations governing procurement in healthcare organizations.
There is plenty of e-sourcing and even end-to-end procurement solutions. It’s important to invest in a system that can be tailored to suit your internal workflow. The vendor must also be willing to provide necessary support including regular updates for their Software-as-a-Service Product.
ProcurePort is the world’s leading provider of procurement software solutions. Our Procure-to-Pay platform supports eAuctions, award management, requests for quotes, purchase requisitions, and more. Get in touch today for a demo.
