As cloud-based procurement solutions evolve, more finance leaders are considering making the switch from on-premises to cloud procurement to ensure more efficient and automated processes. One huge benefit of moving to the cloud is the ability to leverage global supplier networks offering greater geographic reach, real-time data, and better product availability. At many enterprises, finance and procurement teams are driving the move to cloud together to overcome organizational barriers.
There are several benefits of moving to the cloud, such as the ability to generate greater cost savings, streamline purchasing processes, ensure compliance and reduce risks, increase user adoption, and improve cross-functional collaboration across the enterprise. However, business leaders should consider these three factors when deploying such a solution.
Cloud Based Procurement Solution: Factors to Consider
1. The Right Cloud Based Procurement Components
A successful cloud based procurement model requires integrated sourcing capabilities. Make a list of all the requirements that are critical for your organization and consider whether the contract negotiation should happen during the sourcing cycle or pushed further into the contract execution stage. Integrating contract management functionality into a procurement system helps organizations frame legal requirements and include them in their sourcing processes.
2. The Right Integration Strategy
Your integration strategy mostly depends on whether you follow a direct or indirect purchasing model, your on-premises system, and the integration choices available. In a cloud procurement system, account payables are often processed on-premises because typically this is where the financial system of record is located.
3. A Comprehensive Training Plan Which Includes Suppliers
With cloud procurement, there can be two systems for processing invoices and payments. Using two systems can be difficult for suppliers and they might need some assistance and training. However, they are a crucial part of the rollout plan and must be included in your training plans. Similarly, end users will also have to be trained on using a combination of cloud and on-premises applications. End-user training ensures effective collaboration across departments and improves user adoption.
Cloud Based Procurement Solution: Benefits
Procurement has quickly evolved from a tactical approach focused on cost advantages to a more strategic cloud migration roadmap covering the entire procure-to-pay process. Cloud-based procurement systems must not only reduce costs but also increase supply chain efficiencies, reduce inventory, improve quality and drive innovation. Combining capabilities such as real-time access, social collaboration, embedded analytics, and personalized reporting are a necessity for modern businesses.
1. Increased Savings Due to Automation
Automation eliminates manual tasks, reduces human errors, increases efficiency, and lowers costs. Data integration also plays a key role and once data is entered into this cloud-based system, all departments and business units can leverage it for better insights and decision making. Another benefit of automation is that it enables your team to work on more strategic activities instead of spending time on routine maintenance-related tasks.
2. Greater Efficiencies Due to Social Collaboration
Social collaboration is far more efficient than email as it streamlines the authoring and document review processes. Anyone in the organization with access can review, edit or add their feedback in real-time while someone is authoring a document. This removes the need for the back-and-forth cycle of reviews and eliminates the complexity arising due to multiple versions and edits. Efficiency increases, costs are reduced, and the process is accelerated, allowing organizations to benefit from discounts on early payments.
3. Better Efficiency and Control Due to Standardization
The procurement process includes several repeatable tasks that are well-suited for standardization. These systems offer standardized documents, contracts, and data that can be leveraged repeatedly, improving governance and accessibility. All procurement information is stored in one secure database that can be accessed from anywhere, at any time, on any device.
