The benefits of cloud based procurement software

Packaged procurement systems may offer useful functionality, so can be at risk of becoming out of date or needing extra investment, so what are the main benefits of opting for a cloud orientated procurement option?

What is cloud based procurement?

Cloud computing allows you to access IT resources through the internet, rather than having a system installed on your hard drive.  

The cloud allows you to save, store and access your data and information viar the internet, and is the software is based in the cloud it can be updated automatically as part of the services rather than having to upgrade your pre-packaged solution. 

Streamlining cloud procurement processes

In a recent blog, GEP listed three key reasons why a cloud solution can streamline the procurement process.

Simplifying the purchase experience

Cloud procurement simplifies the procurement team’s purchase experience, enhancing user adoption supported by a guided experience. The intuitive search features of the system allow users to quickly find the required goods and services at negotiated prices.

Streamlining purchasing and payments

Cloud procurement solutions streamline purchasing by automating the generation of purchase orders from approved requisitions. Revisions can be managed easily with complete tracking of change history. The system enables automated invoice generation, reducing errors and expediting supplier payments.

Increasing business value

Cloud-based procurement systems enhance business value by providing analytic insights. Value opportunities are identified by analysing spend across categories, business units, locations, and cost centres. The system provides actionable insights on spending patterns to optimise your supplier base and negotiate better prices.

Key benefits of a cloud procurement system

In an online guide, Fraxion broke down five significant benefits of a cloud procurement system.

1. Cost-effective and scalable

One of the most significant benefits of cloud procurement systems is how cost-effective they can be for an organisation. Regardless of where team members operate from, access and usability can extend to the edge of an organisation. Affordable subscription models enable system usage to scale as an organisation grows.

Legacy ERP solutions have traditionally been expensive and complex, leading to only having limited user licences and a small subset of employees having access and the expertise to operate the system. Standard or add-on procurement functionality is often limited and fails in achieving user adoption. Cloud-based systems, meanwhile, are typically much cheaper and easier to deploy and do not require on-site implementations. The feature-rich and purpose-built solutions provide the functionality to achieve procurement efficiency and flexibility. 

2. Fast and easy to use

The future of procurement is here, and modern organisations are using cloud-based systems to optimise processes, reduce paperwork, and gain real-time access to information. Modern procurement systems enable users to respond quickly to changing business conditions and disruption, thanks to powerful automation, data insights, and always-on accessibility via the web, mobile app, or any smart device.

Processes are simplified by intuitive user interfaces, automated workflows, and notifications that initiate action. The ease with which procurement processes can be completed reduces purchasing cycles and frees up more time for staff to focus on key business objectives, rather than admin.

Having a single source of data that's updated in real-time can streamline buying, inform and improve decision making, and reduce the time wasted from dealing with fragmented data sources.

3. Process efficiency

Manual purchasing processes pose significant challenges for most companies and cause delays and bottlenecks that are no longer necessary to deal with. For instance, it is nearly impossible to manually complete a purchase requisition using a business letterhead and get it approved by an out-of-office manager within 24 hours.

With cloud procurement systems, the entire purchasing process is streamlined, from requisition to approval, internal control, to AP workflows, increasing the accuracy and accountability of all purchasing decisions while reducing acquisition cycle times.

Companies can leverage automation features and cloud mobility to drive informed decision-making, spend control, and risk management wherever users are. Spend visibility is another crucial benefit of this, as expanded below, where organisations gain a clear view of the purchase requisitioning lifecycle across multiple business units.

4. Visibility

Cloud procurement systems driven by automation create a more holistic picture of how money moves through an organisation, allowing finance or purchasing teams to better measure, benchmark, and improve their processes.

This enhanced spend visibility gives companies a clear view of the entire procurement lifecycle across multiple business units to determine which practices or departments are wasteful and overspending, and where opportunities exist to generate more savings.

With increased visibility comes greater reporting power, enabling even more opportunities for data-driven decision-making and spend control. Spend visibility puts procurement back into the employees’ hands, empowering greater speed, and productivity across critical business functions, while business leaders maintain financial control.

5. Integration

By integrating your procurement and financial system, you can gain end-to-end efficiency that saves time, decreases human error and manual data capturing, while extending internal controls across the procure-to-pay process. Cloud procurement systems provide proactive policy and budget controls, ensuring that all spend is approved, within budget, and compliant before any payments are released by the financial system.

There are various integration methods that connect cloud solutions to legacy software or enable cloud-to-cloud integrations, such as Application Programming Interface (API), which is a standard communication interface between two or more software applications or systems to exchange data. Companies relying on cloud-driven procurement should be able to integrate their software with third-party vendors and use the API to transmit this data directly into their accounting / ERP system.

This feature further lowers the procurement cost, integrates disparate data sources, and greatly simplifies the management and accuracy of purchasing workflows by removing manual data entry and the margin for error.

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For more insights into Procurement & Supply Chain - check out the latest edition of Procurement Magazine and be sure to follow us on LinkedIn & Twitter

Other magazines that may be of interest - Supply Chain Magazine | Sustainability Magazine

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