Digital procurement or e-procurement is changing the B2B transactions by automating the purchasing process and helping to deliver better results for companies and suppliers. We can see today that companies are constantly analyzing the process to identify pain points for improvement and looking for situations that have the potential to increase their profit margin.
One concern about digitalization is the security between businesses while exchanging information. Systems must be ensured to be reliable and secure while transmitting data. Most importantly, it cannot be accessed by third parties especially when it involves biding documents. Once security is established it is possible to experience the advantages such as:
- Automation: digitalization is transforming the way business is done and data is becoming an important asset as we experience dynamic times. Instead of spending time on manual tasks like requesting a supplier portfolio, digital procurement systems give the information anytime it is needed.
- Time: working smarter is one of the advantages of digitalization. For e-procurement, it means that processing orders are transmitted faster and accurately. System integration and easy interface facilitate communication guaranteeing that the supplier process the order, or the supplier has an item on inventory.
- Quality: having information available for making decisions is a powerful tool but it does not work if it is not trustworthy. Digital procurement reduces errors by sharing complete product information including multimedia content (image, videos, music).
- Costs: in a long-term approach, digital procurement is cost-effective. The idea is that digital improvements always cost more money in the beginning (buying a new platform is costly). But the results compensate for the investments.
Don’t forget that poor planning may cause negative effects. Initiating and implementing phases requires a cultural shift that starts with collaboration from the leadership management driving the change to digital procurement.
To succeed, it is important to remember that automation will not replace people that you have in your team. Prepare and train them to get the best out of digitalization and data insights so they can work efficiently towards the business goals. The road to digital may look like more work but it will compensate time and effort.
>>> An effective procurement journey happens when it includes control, efficiency, savings and create value for the business. Read more here how rethinking your purchasing strategies can differ from a success to a failure situation.