Types of Procurement Software

Procurement software solutions tend to offer a range of features designed to meet a wide variety of user needs. Cohesive solutions include most of these tools, effectively functioning as an all-in-one software package designed to meet all procurement handling needs. Procurement software is often available as an add-on to, or integrated into enterprise resource planning (ERP) and similar solutions, that facilitate control over many business processes from a central location. This does, however, often come at a premium and you may end up paying for a range of supplementary features that your business has no need for.

On the other hand, there are also standalone solutions that specialize in particular areas of the procurement process and often feature integration capabilities with other specialized software. These solutions are generally both simpler to set up and cheaper than their all-in-one counterparts, as well as often providing a more tailored service. However, they do often rely on integrations to provide a comprehensive procurement software experience.

There are many different types of standalone and all-in-one procurement solutions on the market. Regardless of what type of solution you opt for, you should make sure that the functionality you are looking for is covered. Here are some common features and types of procurement software:

• eSourcing – eSourcing software connects users with suppliers in real-time to electronically solicit quotes and proposals.
• Supplier Discovery – Supplier discovery software enables users to search for and filter potential suppliers based on their specific requirements, such as location, estimated delivery time, and more.
• Supplier Information Management – Supplier information management software, also often referred to as supplier registration, onboarding, or enrollment software, helps users to manage and maintain a database of important supplier information, such as contact details. As a result, data accuracy and overall productivity tend to improve significantly.
• Supplier Management – Supplier management software simplifies the task of tracking and reviewing supplier performance, with some solutions even featuring risk assessment capability.
• Contract Management – Contract management software streamlines the process of preparing contracts by providing users with templates and clause libraries. It enables users to send contracts for approval, track revisions, get notified about upcoming contract expirations and serves as a central database for all active contracts with suppliers.
• eProcurement – eProcurement software, sometimes referred to as supplier exchange software, provides users with searchable catalogs for the online purchase and sale of supplies, work, and services.
• eInvoicing – eInvoicing software, otherwise known as ePayment software, enables users to electronically receive supplier invoices, thus enhancing process accuracy and efficiency.
• Spend Data Analysis – Spend data analysis software allows users to generate information based on purchasing trends, enabling insights into potential cost savings and performance enhancements.

How to Choose Procurement Software

The first thing you have to do when choosing procurement software is to identify the specific tools that your company needs when it comes to the process of managing the supply chain. Once you figure out which aspects of that process your business is lacking, you can start researching solutions that actually help make your procurement process more streamlined and efficient.

As aforementioned, there are two main types of procurement software: all-in-one and standalone solutions. Your business may already be utilizing all-in-one solutions, such as ERP software. While it may not have all of the procurement software features you need, it is worth checking whether your existing software setup can efficiently manage your procurement processes.

On the other hand, especially if you are looking to streamline particular aspects of the procurement process, there are tailored standalone products. These solutions are specifically designed to facilitate a smaller amount of procurement processes, such as a dedicated eSourcing software tool, but often do so with significantly enhanced accuracy and efficiency.

Regardless of the type of solution you opt for, it is worth looking out for the common procurement software functionalities: selection and ordering, purchase order approval and delivery, spend data analysis, and billing. Advanced solutions often feature workflow generators, ad-hoc value analysis, bidding assistants, or RFI, RFQ, and RFP automation.

Additionally, procurement software solutions are available as an on-premise or cloud-based system. The main difference between both deployment types is that an on-premise solution is installed locally on the business’ in-house computers and servers, and is managed by their own IT teams.

Cloud-based systems, on the other hand, are essentially hosted by the vendor or service provider on the vendor’s servers. Businesses that are paying for the service can access the platform itself through web browsers and downloadable applications.

Another thing to consider when comparing procurement software is the reputation and reliability of vendors. You want to make sure a vendor provides reliable server uptime, as this will ensure that your operations are never interrupted by external inconveniences. Furthermore, you should check what support is made available, in form of tutorials, guides, or phone/email support—especially if the vendor features different pricing plans with varied support guarantees.

Benefits of Procurement Software

There are many benefits to using procurement software and incorporating it into your existing business process solutions. An effective procurement system will help businesses to save time when managing suppliers and placing orders, track supplier performance, control document handling, reduce miscommunication, and streamline the monitoring of inbound and outbound orders. It will also minimize errors that are common in traditional and manual procurement processes, especially with the ability to easily manage and store large amounts of data.

Additionally, the ability to integrate with other existing systems is something that should not be overlooked. Any software solution nowadays should be capable of integrating with other platforms in a hassle-free manner to help streamline workflows and make business processes more efficient.

Common Features of Procurement Software