Budget management within an organisation can either make or break that company; without strict adherence to budget’s limits, as well as the strategic use of spending within those limits, an organization often loses money through overspending and missed investment opportunities. Inefficient budgeting often arises from a company’s failure to synchronize her budgeting efforts with their purchasing controls and this is due mainly to poor transparency between procurement spending and changing budget levels. Even when organizations use efficient procurement management strategies, these variations can cause major problems, both in back-office cost control and for the bottom line. Procurers therefore need smarter purchasing and this can be achieved through implementing an e-sourcing/contract management software and also by taking advantage of collaborative buying in order to promote an efficient and cost effective procurement system. This ensures increased control and visibility in her procurement processes.
The role of technology in the world of vendor/supplier sourcing, procurement and management is becoming increasingly indispensable. Recent advances in the world of electronic procurement and supplier management technology span many different industries. Any service or product; from paperclips to attorneys may now be sourced, procured and managed electronically. How much of this client-supplier/vendor relationship has moved to electronic platforms however varies from industry to industry and also depends on the complexity of the services and/or products in question but in most cases, all products and a growing number of services are driven by e-sourcing software solutions. The manufacturing industry, for example, is highly engaged and to a greater extent has driven the development and sophistication of e-sourcing solutions. E-sourcing, simply put, is moving what was once a highly paper driven process onto an electronic platform.
Electronic procurement software is one of the most important tools for automating purchasing and financial processes. It facilitates electronic requisitioning, online vendor catalogs management, purchase order and receipt management, and integration with accounts payable. Its purpose is to mainly reduce the costs and time associated with manual processes, as well as to support more accurate product information and more competitive pricing. Leveraging clients’ buying power is also a prominent driving force in the utilization of procurement technologies these days, these tremendous opportunities lets you say goodbye to the traditional, labour intensive way of posting and advertising contract opportunities and RFQ’s.
Benefits of e-sourcing
Implementing an esourcing and contract management solution can bring a variety of benefits to any organisation, mainly improving procurement efficiency and reducing costs.
Esourcing significantly reduces the supply management costs by automating, simplifying and accelerating source to procure processes for goods and services. Esourcing solutions eventually increase bottom line cost savings by focusing on strengthening supplier relationships and streamlining tender processes.
Likewise, visibility into budget management is especially important for organizations with complex global operations. For example, a large corporation in the professional services industry may have dozens of smaller divisions running numerous client-funded projects, all of which are connected to the same central budget. In order for the company to run efficiently and competitively across different countries—with varying time zones and business requirements—procurement professionals and other business administrators must have complete visibility into where the company’s money is going and how successfully its budgets are being controlled.
Greater savings can also be made by public sector organisations collaborating in the procurement of goods and services. This enables the organisations to drive prices down by providing suppliers with greater quantities enabling them to reduce margins. Fortunately, today’s leading eProcurement budgeting tools are built to give organizations real-time control over how their money is spent, no matter how complex and widespread the spend allocation. Advanced eProcurement software can manage budgets in real time by fully integrating existing financial systems (such as the ERP) with requisitioning, catalogs, and Purchase order management—all in accordance with the organisation’s unique business structure and requirements. This not only allows administrators to drill down into minute budget details at a glance, it also enables them to measure and analyze the current use of their funds and strategically plan for future budget cycles.
Implementing an esourcing and contract management solution can be relatively straightforward. Many solutions on the market offer a Software as a Service based solution which can be accessed from anywhere in the world with a web browser and internet connection. A hosted solution requires no additional in house IT infrastructure and reduces implementation times. These software solutions are readily available and are cost effective, even for small and medium-sized enterprises.
Managing a paper- based system is expensive, slow, hard to measure or audit, and harmful to the environment. In the e-sourcing world, the removal of paper from the billing process also helps organizations to meet their CSR commitments. Staff will also be quick to embrace tools that save time and expense; benefits offered by any e-sourcing software solution.