How can technology solutions help in solving common procurement issues?
Your procurement team faces a number of risks and challenges on a daily basis. The main challenges usually are:
- Managing delays and overall spend
- Finding the right suppliers
- Lack of visibility during the procurement process
- Communication errors and, as a result, a loss of time and money
- Getting the best quality materials at the best prices
Your procurement team should always be on the lookout for ways to gain the maximum benefits from the minimum budget.
These are just a few of the procurement issues which your team faces day-to-day. The absence of a streamlined procurement process is the root cause of these issues.
Let’s talk about some of the most common procurement issues and how they can be fixed with the help of technology with actionable steps.
3 Guidelines for Solving Common Procurement Issues
1. Helps You Find the Right Suppliers
This is probably one of the most important yet biggest challenges your procurement team and procurement managers will face. Before your procurement team finalizes a vendor, they need to do a cross-check of the vendor’s business and banking references.
This will help you minimize any chance of experiencing fraud, bankruptcy, or receiving low-quality materials. This will save your company from having to fulfill contract obligations unwillingly.
In addition to this, a poor procurement process can inflate your costs by up to 5 times.
How you can avoid such problems?
You need to automate your company’s procurement process. An automated process will help your company save a lot of time. It can also help you select the right suppliers, who can deliver high-quality materials on time.
Automation will help you streamline the process. As a result, you can scan the records of available vendors and check their past performance. Based on this analysis, you can select the best vendors for your company.
Once you streamline the process, your procurement team can reduce the cost of processing a purchase order by 20%. It will also help you maintain transparency with your vendors. Thus, leading to healthy and long-term relationships with your vendors.
2. Helps You Decrease Average Cycle Time
With a manual procurement process in place, your procurement team may spend too much time reworking the same contract multiple times. As a result, there can be a delay in the procurement process, which leads to an increase in the average cycle time.
However, you can leverage technology to create online order templates and purchase approvals. Whenever there is a need to rework it or create a new one, you can tweak these templates as needed.
Not only will this save the time of your procurement team but it will also help them work more efficiently.
3. Reduces Manual Documentation
Loads of paperwork is involved when your procurement is done manually. Gradually, it becomes difficult to manage, organize, sort and store. In fact, sometimes your team may find it hard to track even a single contract file.
You can leverage technology to cut out manual documentation completely. Technology allows you to go paperless and helps you manage documents much more efficiently. As a result, your team will be able to track records swiftly.
Major Procurement Issues and How to Get Them Fixed With Tech Solutions
Here is an infographic by PurchaseControl that further explains how technology can be used to solve some common procurement issues.