Tech Notes

A Guide to Procurement Software

Today's internet era has completely changed how businesses procure goods and services. Organizations no longer need to hire as many procurement specialists to run their procurement operatiosn. This is because procurement software has made this process much easier by automating the entire process.

In this guide, we will define procurement management software, the benefits and types of procurement management software, and the stages of implementing this technology into your business. By understanding the role of procurement software in the purchasing cycle of a business, you'll be able to make better procurement decisions.

Procurement Management Software Definition

Procurement software constitutes a variety of computer programs that help businesses automate their procurement process and purchasing functions. The software facilitates the following functions:

  • Issuing and assessing tenders
  • Verifying purchase orders
  • Invoice payments
  • Receiving and matching the invoice and order
  • Picking and ordering a product or service

Procurement management software streamlines your purchasing processes by centralizing all procurement-related tasks into a single platform. This technology optimizes communication between your procurement team and the vendors, allowing you to make purchasing decisions anywhere at any time.

Benefits of Procurement Management Software

Streamlining your procurement processes with a procurement management system offers significant benefits, including:

  • Reduced Costs: By automating critical parts of your procurement process, you can save on paperwork and overhead while optimizing your performance.
  • Promotes Transparency: This software ensures that all procurement information available to stakeholders and executives is accurate and compliant with applicable regulations.
  • Faster Transactions: Automating the procurement process speeds up the purchasing cycle and reduces time spent on non-essential tasks, such as manual reporting.
  • Improved Inventory Control: By tracking inventory levels and quickly ordering from preferred vendors based on demand, this application helps your business improve its ability to meet customer needs while reducing waste.

Types of Procurement Management Software

When choosing a procurement management system, it is essential to understand the different types of software available. Depending on your business needs, you can implement a system that is as simple or robust as you require. The various types of software include:

[H3] Spend Analytics

Spend analytics software allows organizations to track and analyze spending across different departments and projects to identify areas of improvement and assess overall efficiency.

[H3] Supplier Information Management

This tool helps businesses manage their supplier relationship by getting access to a supplier's information, including location, certification, contacts, performance history, and capacity.

[H3] Contract Management

Quickly create contracts using pre-built clause libraries and pre-written templates. This software also automates contract management processes, including contract approval, payments, and variations.

Purchase Order Software

This software automates the purchasing process by keeping records of the details of each purchase order, reducing waste and saving time.

Electronic Sourcing (eSourcing)

Enables businesses to receive quotes and proposals from current and potential suppliers electronically.  

Electronic Invoicing (eInvoicing)

Connects a company's accounting system with suppliers by enabling them to access online invoicing, which is more transparent and accurate.

 

Stages of Implementing Procurement Software

Implementation can vary depending on the needs of your business; however, the following five steps constitute the typical process of incorporating procurement software into your business:

State 1: Preparation and Mapping of Master Data

For procurement software to work optimally, you must have accurate, up-to-date master data. This includes information on products, suppliers, customers, historical purchases, and pricing.

Stage 2: Establish Document Formats and Design Templates for Procurement

Further streamline your procurement process by creating document templates for repetitive processes such as purchase orders and requisition forms. 

Stage 3: Trial Run

Trial runs allow you to make any necessary changes before going live. They help you identify any issues that you could encounter with the software.

Stage 4: Integrations 

For optimal performance, you can integrate your e-procurement software with accounting and finance, ERP systems, inventory management solutions, and other systems your business may use.

Stage 5: Launch e-Procurement

Once the previous steps are complete, you can take your procurement management software live and scale it to the needs of your business.


Why Choose Tada?

At Tada, we believe that procurement software should be easy to use and integrate with your business processes. As such, our Procurement Control Tower is designed to enhance productivity, reduce expenditure, manage risk, and improve efficiency for procurement professionals.

Contact us today to learn more about this solution and how we can help you achieve your procurement goals.