I find shopping for procurement software something akin to trying to pick out cereal. The 503 options and subtleties leaves me with a blank expression asking: what’s the difference?
Options abound because procurement is no longer asking if it will implement technology, but rather how?
It’s all part of the up-and-coming eProcurement or e-Procurement (procurement conducted through the internet) movement that’s sweeping purchasing.
The problem is, most of the solutions on the market are only addressing half the challenge.
The future of procurement is eProcurement
But first, why should we embrace more technology in our procurement?
Because despite the scoffing Luddites, when technology is done well it frees you up to focus on core business.
Procurement shouldn’t ask should we automate as much as what should we automate? Where are machines (whether software or hardware based) better positioned than people to create value and achieve success?
If we divide the end to end procurement process into its major components, there are subcomponents of each that are prime targets for automation.
The targets that are typically automated or enhanced by technology fall within certain broad categories such as:
- Spend management
- Contract management
- Invoice processing
- Expense management
- Requisition and approvals
- Vendor management software
(See more categories here). More and more procurement is comprehensively moving to an e-Procurement model. However, you’ll notice most of these facets focus almost exclusively on supplier management of existing partners.
What about the critical process of finding and selecting your vendors and suppliers?
How RFP software fits in
This is where RFP Software comes in.
The Request for Proposal (RFP process) is a critical, yet highly underrated part of procurement.
(Click the image below to download free eBook explaining nitty gritty of RFP software.)
Whatever platform you’re interested in, it should make supplier evaluation easier, helping you set priorities and compare potential partners.
Important features to look for:
- Apples-to-apples scoring comparison (across each question)
- Automated weighted scoring tabulations
- History/record of who has been invited and selected for each project
- Ability to reuse previous RFPs/RFIs
In other words, the big value of RFx procurement software is it helps you cut through the noise of your vendor selection.
It's the second half of the e-Procurement equation.
We're already using software to negotiate and communicate with suppliers, why not leverage technology to find them as well?
Bottom line, if you’re looking for a better way to find and select your partners, you (probably) won’t get it from a document portal or contract management system.
The tool that can help you manage current suppliers is likely not the same tool that can help you find them.
The temptation of course is to pay for a solution suite, but that rarely addresses all your needs. Which is why it's worth taking the extra time to fully research your options and identify what you really need.
Most procurement software focuses on day-to-day maintenance and management, while RFP software specifically helps you compare and choose those strategic relationships.
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**Image credit: Gratisography, Ryan McGuire