For electronic procurement or “eProcurement” software, an on-premise solution used to be the only option. It required every company, no matter how small, to hire IT expertise at a depth of staff sufficient enough customize and manage the whole system in-house. Companies also needed to purchase the hardware necessary to meet scaling needs. For business continuity concerns, that meant geo redundancy and regular backups too.
As a result of dedicated support, that model of on-premise procurement software was costly. It used old software on old machines. As time goes on, the systems can feel clunky and outdated. That’s where the cloud comes in looking very slick and modern by comparison. How exactly does cloud-based software implement best practices in the procurement industry? Let’s look at the components of eProcurement software suites and the cloud modules that are pushing the industry to move on from the older style, outdated on-premise solutions.
On-Premise vs. Cloud Systems
When enterprise cloud technology came onto the scene a decade ago, the benefits were obvious. For enterprises with large geographic coverage, the accessibility of the cloud gave procurement teams renewed abilities to communicate and work on shared assets at the global level and from remote locations. The small companies who were feeling IT commitment strain were left behind at first. Now that eProcurement is mainstream and the cloud handles both data storage and full-sized applications, small and medium sized enterprises (SMEs) are taking advantage of the benefits too. Small Biz Daily announced last year that migration of on-premise business applications to cloud infrastructure is the best modernization opportunity facing the market today. Though it can be a dramatic organizational change, the “scalability, operational excellence and cost savings” gained by the move are worth it.
Transparent Business Processes
Handling eProcurement in the cloud is revolutionary because best practices in the industry tell us that procurement processes go smoother with transparency. eProcurement offers centralized access to data, giving you a bird’s eye view of every deal from start to finish.
Not only that, but the integration capabilities of incorporating other cloud-based platforms (via SaaS software as a service, APIs, and more) means you negotiate prices with full data sets pulled from peripheral systems, such as your enterprise resource planning or ERP program. With everything at your fingertips, you can make better deals and manage your resources based on rich data instead of hunches.
Plus, eProcurement in the cloud helps organizations streamline the procure-to-pay (P2P) processes, enforcing negotiated savings by electronically double-checking on integrated contract and sourcing options. Cost compliance goes up and maverick spending goes down. Cloud-based eProcurement with metadata tracking and automated filing also makes it easy to find a PO or an invoice at a moment’s notice.
The Cost-Benefit Ratio
With so many clear business process improvements, it can be hard to believe that the cost is better than on-premise options, but it is. From a smaller investment required at initial purchase to the functionality of contract management with full data transparency, the cost-benefit ratio of cloud-based eProcurement beats out on-premise solutions in nearly every arena. Further savings are compounded during negotiations carried out by your team. Saving time and money is obvious, but the issue holding people back from migrating to the cloud is a fear of change.
Though starting in a while new system may seem daunting, migration into the cloud is a big step towards future-proofing your system. The moment you make the move, it eliminates the next monolith system purchase from down the line. It’s ensuring your future continuity and maintaining a competitive edge. As the industry moves to the cloud en masse, the sooner your organization makes the leap, the better. To get a feel for the data transparency and functionality of the cloud, request a demo of ProcurePort’s cloud-hosted e-procurement solution and check it out today.