Get to Know What is e-Procurement and The Benefits

Did you know that digital procurement can change how businesses buy things? e-Procurement uses the internet to make buying goods and services easier. It helps companies in the Philippines work more efficiently, save money, and get better at purchasing.

Failing to adopt e-procurement can expose your business to inefficient spending and overlooked opportunities for savings. Because not leveraging digital procurement technologies means missing out on streamlined operations and potential financial advantages.

In this article, we will learn more about what is e-procurement, the advantages of e-procurement, and its components, to gain a better understanding of how it works.

What is e-Procurement?

E-procurement, also known as digital or electronic procurement, helps businesses buy goods and services online. It uses the internet to make buying processes easier and faster, moving away from paper tasks. This method lets companies work with their favorite suppliers, handle orders, track deliveries, and make payments smoothly.

This approach brings many advantages to companies. It cuts down on the time and work needed to buy things the old way. By using technology, businesses save money on office work and manage suppliers better. It also improves how they keep track of their inventory, helping them have just the right amount of stock.

Additionally, e-procurement software lets firms look at more products and services from different suppliers. This means they have more options and can find better deals. E-procurement changes the way companies buy things. It makes processes more efficient, saves money, and gives firms an advantage in today’s digital world.

Read also: Purchase Order vs Invoice, What’s the Difference?

Components of e-Procurement

e-Procurement system involves several parts to help with the buying process. It deals with organizing purchase requests, making a Request For Proposal (RFP), receiving bids, evaluating them, running e-Auctions, choosing vendors, and handling vendor contracts.

• Management of Indent: The management of indent deals with making and checking purchase requests. This important step helps organizations figure out what they need. They then ask formally for those goods or services.
• Creating an RFP: Writing a Request For Proposal (RFP) is a key part of e-procurement. It clarifies what the organization wants to buy. This lets possible suppliers understand what’s needed and offer their best proposals.
• Submission of a Bid: When the RFP is out, suppliers send their offers based on the RFP’s details. Their bids show the cost, terms, and how they plan to deliver what’s asked for.
• Opening and Judging of Bids: After collecting bids, organizations look at what’s offered. They compare prices, quality, and how fast suppliers can deliver. This helps them figure out who offers the best deal.
• e-Auction: Sometimes, an e-Auction might be used in buying goods or services. Here, suppliers try to outdo each other online. They aim to give the most attractive prices and contract details.
• Vendor Selection: After looking at bids or e-auction outcomes, the best vendor gets picked. This choice is based on who best fits the organization’s needs. Then, talks continue with the selected vendors.
• Vendor Contract Management: Choosing the vendor leads to contract talks and management. This involves setting all terms, meeting legal needs, and making official agreements. It cements the partnership.

Benefits of e-Procurement

The benefits of e-procurement system include revolutionizing traditional procurement practices, and it’s crucial to understand the tangible benefits it brings to organizations. Here are the key advantages that demonstrate why adopting e-procurement is not just beneficial, but essential for modern businesses.

Information transparency

e-Procurement puts all procurement-related data in one place. It’s easy for approved users to see, enhancing transparency. This improves how procurement trends and metrics are reported and analyzed. With access to up-to-date data, organizations can make smarter choices. They can tweak their procurement strategies to get better results.

Cost savings

e-Procurement can save a lot of money. This automated procurement system cuts down manual work and paperwork. This not only saves time but also cuts costs related to manual processing like printing and storing. e-Procurement also makes it easier for organizations to get better deals from suppliers. This leads to savings when buying goods and services.

Automated procurement process

e-Procurement system makes the procurement cycle more streamlined and efficient. It automates everything from the payment request. This gets rid of time-consuming manual tasks and lowers error risk. With automation, procurement meets organizational rules and happens on time.

Enhanced inventory management

Good inventory management is key for top-notch operations. e-Procurement makes superior inventory management possible. It lets organizations control and see procurement activities better. This helps track stock levels and monitor how much is used, optimizing inventory costs. Organizations can keep just the right amount of stock and avoid having too much or too little.

Larger product and service selection

Online procurement gives access to more products and services from many suppliers. This helps organizations find the best fit for their needs, whether to save costs, improve quality, or other goals. With more choices, organizations can make better decisions and choose suppliers that offer the best value.

Also read: 12 Best Purchasing Management Software in the Philippines

5 Steps of e-Procurement

To effectively implement e-procurement within an organization, it’s important to follow a structured process. This ensures that all potential benefits are realized while minimizing the risks associated with transitioning to a digital procurement system.

Below, we outline the five essential steps of e-procurement, guiding you through from initial planning to full deployment and optimization.

1. Informing: First, organizations let potential suppliers know what they need. They might use Requests For Information (RFI) or do market research.
2. Sourcing: Then, they find potential suppliers. They look at who can meet their needs the best.
3. Tendering: Next, organizations ask the chosen suppliers for proposals or bids. This helps them compare what’s on offer.
4. Auctioning: Sometimes, there’s an auction step. It’s for negotiating prices and terms. E-Auctions help get the best deals.
5. Ordering: Last is ordering. The organization picks a supplier, places the order, and oversees the process until delivery and payment.

How does e-Procurement Work?

e-Procurement modernizes the traditional buying process through the use of digital tools, primarily through an e-Procurement software platform that manages procurement activities. Here’s a step-by-step breakdown of how it works:

• Needs Identification: Determine what the organization requires, identifying the necessary goods or services for effective operations.
• Supplier Selection: Evaluate potential suppliers based on their capabilities, reputation, and pricing to ensure the acquisition of high-quality goods or services at competitive prices.
• Purchase Orders: Utilize the electronic procurement software to create detailed purchase orders, specifying quantities, specifics of the goods or services, and delivery timelines.
• Order Processing: Send the finalized purchase orders to suppliers, who then deliver the requested goods or services according to the agreed schedule.
• Tracking and Management: The e-procurement software tracks critical data throughout the procurement process, including supplier information, order details, and payment terms. It provides a comprehensive view of the entire procurement cycle, monitoring order status, verifying deliveries, and ensuring compliance with procurement policies.
• Final Oversight: Oversee the complete procurement cycle from receipt of goods or services to payment, which involves quality checks, invoice processing, and timely payment to suppliers.

HashMicro is the Best e-Procurement Software Solution

HashMicro is recognized as the premier enterprise procurement system provider in the Philippines, catering to the needs of over 1750 clients. Designed to offer flexibility, it allows for full customization to meet specific organizational needs and supports an unlimited number of users without additional cost.

HashMicro e-Procurement software is equipped with advanced features to streamline procurement processes and enhance operational efficiencies, which include:

1. Automatic Vendor Rating: Automatically evaluates vendors based on punctuality, pricing compared to other vendors, and the completeness of deliveries, ensuring that businesses partner with the best suppliers.
2. Budget Tracking & Limit Per Purchase: Monitors spending and enforces pre-set budget limits per purchase to maintain financial control.
3. Multi RFQ Comparison: Facilitates the comparison of multiple Requests for Quotations (RFQs), allowing businesses to assess and select the best offer effectively.
4. Service Work Order Tracking: Tracks and manages service-based work orders throughout their lifecycle, ensuring timely completion and compliance with terms.
5. Multi Purchase Model: Supports various purchasing models including products, services, assets, and rentals, providing versatility across different types of procurement needs.
6. In-Depth Purchase Analysis: Offers detailed insights into procurement trends such as frequently bought products, preferred vendors, and average price per product, enabling informed decision-making.
7. Direct Purchase Management: Streamlines the process of direct purchases, reducing time and improving efficiency for straightforward transactions.
8. OCR for RFQ: Utilizes Optical Character Recognition technology to automate the extraction and processing of data from RFQ documents, enhancing accuracy and speed.

With these features, HashMicro empowers companies to optimize their procurement strategies, improve vendor relationships, and achieve significant cost savings.

If you’re looking to streamline your procurement processes, HashMicro’s Software might be worth exploring.  For a more efficient and error-free procurement experience, click the banner below to discover how this solution could benefit your business.

Conclusion

The adoption of e-procurement is critical for businesses seeking to streamline their procurement processes, enhance transparency, and achieve cost efficiencies. Effective e-procurement solutions not only simplify the acquisition of goods and services but also provide essential analytics that support strategic decision-making and resource management.

Choosing the right and the best e-procurement software is crucial as it becomes the backbone of a company’s purchasing strategy. The ideal solution should offer comprehensive features that cater to specific business needs, support scalability, and provide reliable after-sales service.

For businesses in the Philippines looking for a robust e-procurement system, HashMicro stands out as one of the best options. Known for its adaptability, extensive client base, and strong support structure, HashMicro can transform your procurement processes. Get the chance to try the free demo now!