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The Essential E-Procurement and Acquisition Process Trends Your Business Should Follow This 2020

The Essential E-Procurement and Acquisition Process Trends Your Business Should Follow This 2020

E-procurement, also known as supplier exchanged, allows B2B clients interact with their suppliers and order products and services they need in a transparent and streamlined manner. Adopting this system of corporate purchasing allows businesses and governments to find, select and establish partnerships with suppliers in a clear and efficient manner

The Key Elements of E-Procurement Processes

The B2B or B2G (business to government) purchasing cycle is longer than a B2C transaction. First of all, the suppliers need to meet specific criteria set by the buyer. In the case of government purchases, the procedure also involves a public bid with clear rules set by the law.

Finally, the buying decision involves several people, typically the purchasing manager, financial manager, operations manager, etc. In this context, the e-procurement and acquisition process involves three major steps:

  • Request for information – in this initial step, the buyer requests general information about the potential suppliers, such as its production capacity, terms of business, etc.;
  • Request for proposal – at this point, the buyer is requesting a detailed framework for doing business for a specific project or purchase, including the schedule, delivery and payment terms;
  • Request for quote – in the final step, suppliers are requested to send a financial estimate for the proposed purchase.

What Are the Benefits of Using E-Procurement Processes?

An e-procurement interface reduces the amount of paperwork, speeds up the purchasing process and allows checks to be performed at every step of a purchase cycle. At the same time, it eliminates errors as well as attempted fraud.

For large corporations with representatives at global level, e-procurement systems allows local branches to connect with approved suppliers situated in the same geographical area. At headquarters level, accessing the e-procurement database helps management supervise the spending for all the branch offices, without having to send a team to each location to look at purchasing documents.

As for governments, which need to comply with strict public procurement laws, e-procurement processes ensure transparency as well as accountability for each purchase.

What Is the Outlook for E-Procurement and Acquisition Processes?

High speed internet and powerful computers are the two key ingredients for the strong development of e-procurement processes. This is an era where a huge amount of data is generated every day and stored in various on-premise or cloud facilities.

Buyers and suppliers now have the most advanced facilities to get in contact, negotiate contracts and work together. And, as technology becomes more advanced, e-procurement systems and processes become safer, faster and more integrated.

Here are some of the trends which will transform e-procurement and acquisition processes in 2020 and which your company should consider implementing:

1. Cloud Technology 

Cloud technology facilitates the development of SaaS (software as a service) business solutions, including e-procurement systems. Instead of purchasing a CD and installing a software suite on a computer or server owned by the company, all the functionalities and the storage space are available as a subscription service.

This has several benefits, such as:

  • Inter-connectivity and interfacing between various software solutions
  • Improved collaboration (several employees can work on the same project/document at the same time)
  • Access to the interface from any approved device (desktop computer, laptop, smartphone)
  • Industry-grade cyber security for valuable company data.

For e-procurement processes, cloud technology creates superior integration between databases from various departments: accounting, purchasing, production, etc. This will help shorten the time for corporate purchases, as the need for a product/service is identified ahead of time and the purchase process is completed before the respective item runs out of stock completely.

2. Increased Transparency

Transparency is a key demand from customers at all levels: B2C, B2B and B2G. In the current political and social context, influenced by climate change and demands for more accountability from all industries, sustainability and ethical sourcing will become the main issues for e-procurement.

With a transparent purchasing system, where each finished product can be traced back to its raw materials, businesses can win the consumers’ trust and grow their brand reputation.

3. Continuous Digital Transformation

Digital transformation is, by its nature, continuous. Technology advances at a fast pace and those who want to stay in business must keep up with it. For e-procurement, one of the biggest aspects in digital transformation is the adoption of punchout catalogs.

These digital catalogs allow corporate buyers to search for the product they need in a catalog that is integrated with their e-procurement platform. As a supplier, having a punchout catalog is one of the most important steps to take in the process of continuous digital transformation.

4. Building Stronger Relationships with Suppliers

Success in business is not a sole race, but a team effort. As global economy becomes more and more inter-connected, strong and trusted relationships between suppliers and corporate clients are the key to success.

One of the main benefits of having a trusted long-term supplier is increased predictability in production as well as greater flexibility to adapt to changes in demands from end clients. Working with an advanced e-procurement system facilitates the development of these strong relationships by exchanging information, data and achieving a mutual understanding of needs and expectations.

5. Blockchain 

Blockchain technology was first theorized in 1991 by Stuart Haber and W Scott Stornetta. However, it was put into practice by a developer (or team of developers) under the pseudonym of Satoshi Nakamoto in 2008. Nakamoto’s wite paper described the working model for a blockchain. The same person(s) implemented the first blockchain one year later, in 2009, as a public ledger for transactions with the bitcoin cryptocurrency.

Ten years later, blockchain technology has become a hot topic in many industries, including the financial institutions of the highest level. For example, JP Morgan, UBS and Wells Fargo are working on creating their own cryptocurrencies.

But what is the role of blockchain in e-procurement processes? This technology is extremely versatile and goes much beyond transactions with cryptocurrencies. It can be used for:

  • Contract management
  • Tracking payments
  • Monitoring the supply chain
  • Data sharing
  • Transfer of title for real estate, land and other similar properties
  • Record keeping 
  • Equity trading.

While blockchain has not yet been implemented in e-procurement platforms, there are powerful signals that this will change shortly. The number one benefit of using blockchain technology is the superior security to data, which is protected from unauthorized access, counterfeiting and destruction. At the same time, since the public ledger is updated in real time, the entire e-procurement process will become faster, with payments and confirmations of delivery being processed instantly.

Samantha Wallace is a veteran tech writer and editor who has worked in several eCommerce companies. She has been covering technology online for over five years. She is the Content Advocate for Greenwingtechnology.com.

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