How Electronic Procurement Systems Reduce Your Costs? 

Procurement processes are one of the most sensitive issues of companies. Because, on average 30% of all expenses of an average company consist of procurement costs. For this reason, the more controllable, transparent and efficient the procurement processes, the more profit to be made.

There are 3 main motivations for companies to prefer electronic procurement systems. These,

  • Profitable and Efficient Procurement Processes
  • Visibility, Transparency and Traceability
  • Easy and Fast Purchase

Electronic procurement software is a comprehensive web-based system designed both for companies and its suppliers, facilitating the life cycle of tender processes. The systems offer an environment that enables proactive management of the relations between the company and its suppliers through a safe and dynamic environment.

Electronic procurement systems are fully integrated systems that start from demand management and digitalize your entire process with supplier information, e-tender, supplier management, order management, logistics, payment and billing, warehouse and contract management. While software supports efficiency, it helps protection of ethical values such as transparency, accurate bid evaluation and anti-discrimination.

Real Time Cost Tracking

Keeping track of whether your company / project budget is in line with your plans is one of the most critical issues in terms of the company’s profitability. Online Procurement System ensures to work with the best suppliers at the best price at all times.

The logic and the functionality of the systems is developed to provide you real-time reports. If your procurement system cant give you real time budget reports (some ERP logics are like that), it makes impossible to follow the budget deviations that may occur. As a result, you only have a chance to intervene after the budget deviations. A system built on real-time control allows intervention before problems arise or occur in your purchasing processes and helps prevent financial losses. It can prevent the purchase of the product / service without a budget or exceeding its budget at the order stage. It prevents the purchase of unnecessary or extra materials throughout the company.

Purchase Approval Mechanisms

No matter how purchasing systems had been implemented and how fancy features it holds, approval mechanisms are among the keys of this job. Procurement software should include auditable approval mechanisms to ensure that purchasing requests and supplier choices are suitable with company policies and procedures.

Flexible, editable approval mechanisms, which are available at all stages of the process, aims to guarantee accurate and transparent purchases without manual misjudged interventions.

Productivity and Automated Processes

Optimized purchasing solutions designed according to practical life needs enable companies to speed up and automate their standard purchasing processes and minimize personnel, process or supplier-related problems. Systems helps companies to increase internal process efficiency and save resources.

Supplier Management

Supplier Management Systems has a key importance for the success of the system. Determining the quality/ sustainability of a supplier and evaluating it from all respects is critical for your purchasing process. For this reason, any kind of documentation stating competencies of your suppliers should be kept on your procurement system. It should be continuously inspected and automatically perceived by the system according to the type of tender for a transparent and right vendor selection. Suppliers should be constantly valued (lead time, compliance with the plan, etc.) based on their supply performance, and choices should be made according to these evaluations for new purchases. Reducing supplier risk allows you to control your excess spending on low-performing suppliers and improve your organization’s profit margins.

Online Procurement and E-Tender Softwares guarantees that all companies (suppliers) registered in your Supplier Network are aware of all related tenders within the company. Suppliers can automatically be informed about the demands by matching themselves with the products they produce or the services they offer in the portals where they are registered. The best successful supplier management software provides an advantage to the company in terms of product / service quality and cost with the development of supplier relationships.

Bid Comparison and Evaluation

If you cannot collect supplier bids in the same formats, you may have serious difficulties in making apple-apple comparison in the bid comparison chart. With online web based purchasing systems’s embedded standard bid entry screens and AI-based bid comparison tools, it can offer you the most suitable bid automatically. It allows you to choose the most suitable supplier bid based on business requirements by quickly evaluating supplier offers based on pre-determined factors such as price, quality and value.

Supplier Trust and E-Tender Performance

On the selection of e-tender and procurement systems, flexible and secure systems should be preferred, which can clearly express the supplier selection criterias. Because a transparent electronic tender designed with the right processes and suppliers will both speed up the tender conclusion process and provide maximum economy.

Another factor affecting the performance of the e-tender process is the number of tender participants. Competitive prices can only be achieved if many suppliers join an E-Tender. The systems may determine the most successful suppliers (criteria such as price / performance, quality, adherence to the lead time) in past purchases and make it obligatory to receive offers from similar suppliers. In this way, the tender can be completed in the most appropriate way in terms of quality and budget.

For a healthy E-Tender, suppliers should be convinced that the system is managed in a transparent and fair manner. The perception of any non-compliance or malicious intent by the supplier may offend the suppliers. If the supplier trusts the platform, it can easily give the most competitive price, otherwise it may try to increase its margin by looking for missing or weak points in the system during the tender.

How Should Electronic Tender Results Be Evaluated?

The tender method reflects the corporate identity of your company. The main purpose of an e-tender company is to evaluate a material, equipment or service through different variations (procurement time, quality, price / performance, etc.) and purchase the most suitable product in accordance with its budget. The most important issue here is the ability to make an apple-apple comparison.

Companies participating the tender can sometimes act margined in their offers. Tender procedures and rules can be used to prevent this. With such practices, the difference between the highest and lowest price in supplier offers can be limited and margined offers can be avoided.

In case the supplier receives the tender, Buyer must be absolutely sure that the product / service to be given is exactly the same with the product / service undertaken in the tender. If the Buyer and the team receiving the product / service are different or disconnected from each other (distance etc.), the possibility of loss or malicient intent should be well controlled.

For more information, please visit our ENKA Systems website.  EGPS Overview