Procurement Management is one of the most crucial engagements an organization conducts with its partner base. The effectiveness of procurement workflows is a fundamental aspect, which determines partner relationships and scalability as well as affects the bottom line of the company. Bottlenecks in this quintessential process can cause major supply problems, which is why a streamlined and logically built workflow is inevitable for a company striving for booming success.
In this article, we are going to elaborate on how digital workflow management software can aid procurement teams to increase their efficacy. Moreover, we will highlight the most important features and capabilities of such solutions through a life-like workflow example.
What is Procurement Management?
Procurement management is the procedure of overseeing the acquisition of the products, materials, goods, and services through tendering or competitive bid processes. Procurement, or in other words, sourcing, is responsible for increasing the profitability of the organization by reducing raw material prices and costs and identifying better sources of supply. As a result, a procurement and workflow management system should be simple, transparent, and easy to use, so as to make even the most complicated procurement processes manageable. Centralized procurement support to keep control the expenses matching with annual procurement plans. The process collects all business unit request categorize and consolidate into Request for Interests(RFI) create Request for Quatation(RFQ) and publish tender documents for partners.
The challenges of procurement
Throughout every procurement lifecycle (starting from planning and transaction all the way to approval and evaluation) numerous administrative steps are involved, which if done wrong, can not only hinder efficiency but also place a significant burden on the Procument department and for the management. Delayed procurement processes can hinder core business services and cause unhappy employees.
The four biggest procurement challenges include lack of communication, difficulty finding contracts, poor supplier relationships, and lack of unified management processes.
But what if there was a solution that could not only mitigate all these difficulties but also streamline and simplify the entire procurement lifecycle?
Procurement workflow management
The solution lies in Workflow management, especially in technologies that put a great emphasis on no-code process development and step-by-step user guidance to minimize error rates. Such solutions enable organizations to produce rapid and beneficial changes in procurement management.
Furthermore, through templatization and automation, these tools take an immense load of administration off the shoulders of procurement teams while also fostering a paperless work environment. Not to mention the fact that automation comes with the favorable advantage of decreasing the number of errors deriving from manual activities.
How does a procurement workflow management system work?
If this is the first time you hear about procurement workflow management, getting yourself familiar with its functionality is essential. Here is a simple, step-by-step, life-like example of what you can do with such a system:
Before you start, It is worth creating and uploading an annual procurement plan master database to have a baseline. It is not a must have, but makes your life easier moving forward.
You start the procedure in a standardized, digital, and template-based workflow for PO’s, which is aiding your organization on the path toward digital transformation in multiple ways. Thanks to templatization, you don’t have to create forms and contracts from scratch, thus saving time and money for your organization.
Secondly, you will have the chance to automatically appoint participating colleagues in predefined roles. Thanks to this function, responsibilities, and to-dos will always be clear to your team members while onboarding a new workforce becomes easier due to clear-cut expectations.
Next, you will be able to invite potential suppliers to the workflow and add details to the system as master data. If you had communication, reliability, or transparency issues with your partner, this function will undoubtedly be the one that helps you two to get on better terms with each other.
A multifunctional procurement workflow management system will also enable you to receive and check all incoming offers via a single intuitive interface. This transparent platform brings all offers and a multitude of offer management options under one roof that your personnel had to store, view, and handle separately before.
By providing corrections, if needed, and auto-filling necessary form fields, an all-encompassing tool anulls the number of typos as well as makes the completion of the procedure faster than ever before.
Thanks to built-in offer evaluation functions, which are based on predefined thresholds and policies, comparing incoming offers to each other becomes self-evident. You can set your thresholds according to your expectations and needs, then assess all offerings on equal terms.
Creating documents to prepare for decision-making is a monotonous and time-consuming responsibility. However, a top-notch procurement workflow management system is endowed with template-based documents that you only need to personalize with the necessary data.
Fortunately, a modern management system will enable you to digitally conduct the entire decision-making and approval process. There are no more forgotten attachments, contract versions, missed deadlines, or late notifications.
With a transparent and self-evident user interface, which is suitable for personnel with all technological skill levels, concluding the process and starting a new one on the fly is as easy as ABC.
In this article, we’ve explored the most common challenges of procurement and saw why it has such a fundamental effect on a company's performance. Dealing with a partner organization is never an easy task, though when there is a preset and logically built underlying workflow that defines the course of actions, error factors decrease and efficacy shoots through the roof.
Furthermore, we’ve introduced a real-life example of how a Procurement Workflow Management tool can facilitate the everyday responsibilities of procurement teams through automatization, standardization, and templatization.
Itiner is a combination of an intuitive Workflow Management System and EDMS, record management and data asset management.
Itiner can help you through your:
Purchase order management (uniqe&framework contract based)
Evaluation and decision making process
Delivery notes management
Itiner is an innovative tool built not only for defining business processes and data management procedures, but also for managing daily tasks & workflows. End users can learn to use it in less than 60 seconds thanks to its intuitive UI & UX. It can run on any device from terminals to mobile devices and tablets. No coding skills or fancy qualifications are needed. Your control over your work has never been this powerful and easy!
If you are looking for ways to improve and evolve your procurement management processes feel free to get in touch.