Digital Procurement Platform 101: Everything You Need To Know

Do you and your team still struggle with manual processes?

Well, you’re not alone.

Many procurement professionals feel the same way. However, in modern technology, this pain point can easily be fixed by simply integrating digital procurement strategies into your business.

We’ll dive into this concept further in this blog.

We’ll start by addressing a fundamental question: What are digital procurement solutions, and how can it liberate your company from procurement inefficiency?

From there, we’ll explore the step-by-step processes, and unveil its transformative benefits to your business.

Discover how digital procurement can help your company speed up its procurement functions!

What Is A Digital Procurement Platform?

A digital procurement platform is a cloud-based software solution that automates and streamlines your company’s procurement process.

It helps your organization to manage your spending, supply chains, and supplier relationships more efficiently and effectively.

Digital procurement platforms include features such as:

• Requisitioning and approval workflows: Automate the requisition and approval process for goods and services with customizable workflows and notifications.
• Purchase order management: Create and manage orders, track order status, and automate invoice processing.
• Catalog management: Create and manage electronic catalogs of goods and services, with pricing and product information.
• Supplier management: Create and manage supplier profiles, track supplier performance, and automate supplier onboarding and offboarding.
• Spend analytics: Generate reports on direct spend, suppliers, and categories to identify areas for savings and improvement.

How Does A Digital Procurement Platform Work?

Without a doubt, a digital procurement platform can help your procurement organization to:

• Reduce procurement costs by automating tasks, streamlining workflows, and improving supplier relationships.
• Increase efficiency and productivity by automating manual processes and allowing staff to focus on more strategic tasks.
• Improve compliance by ensuring that procurement processes are followed consistently, and all necessary documentation is in place.
• Gain visibility and control over the procurement process by offering a centralized platform that shows all procurement data in one place and provides real-time insights into spend, suppliers, and performance.

To make it easier for you to understand how a digital procurement platform works, here’s a breakdown of how a digital procurement platform can help streamline operations within your business:

Identifying Requirements

A digital procurement platform provides a central repository for all your procurement data, which includes your product and service catalog, supplier information, and spending data.

Using analytics, a digital procurement platform can identify trends and spending patterns within your company. As a result, it becomes easier for your organization to identify new requirements or changes in your company’s operations.

Procure-to-Pay Process Approval

A digital procurement platform automates and streamlines your requisition and approval process by:

• Providing an electronic requisition form that employees can use to request goods and services.
• Routing requisitions to the appropriate approvers based on customizable workflows and approval rules.
• Providing real-time visibility into the status of requisitions.
• Sending notifications to approvers and requestors when requisitions are approved or rejected.

For example, an employee within your company can use a digital procurement tool to requisition a new laptop.

The platform will then route the requisition to the employee’s manager and the procurement department for approval.

Once the requisition is approved, the procurement department can create a purchase order and send it to the supplier.

Supplier Selection

Did you know a digital procurement platform can also help your organization select suppliers?

Digital procurement platforms can help your organization select suppliers by:

• Providing a central database of approved suppliers.
• Allowing you to create and manage supplier profiles, including information such as pricing, product and service offerings, and performance ratings.
• Providing tools for comparing supplier quotes and evaluating supplier performance.

Evaluation And Supplier Management

Digital procurement platforms have features that help your organization assess and manage suppliers.

These features include tools for tracking supplier performance, like on-time delivery rates, quality measures, and cost savings.

These also have features for handling supplier contracts, including performance reviews, contract renewals, and termination procedures.

How Does ProcureDesk Work As A Digital Procurement Platform?

Our team has developed a digital procurement software ProcureDesk, to help automate an organization’s manual purchasing process.

ProcureDesk boasts some of these top features:

• Customizable requisitions that simplify the process of creating purchase requests tailored to your specific needs.
• Budget controls prevent overspending by allowing you to set detailed budgets, including at the account, class, and department levels.
• Tailorable approval workflows that guarantee that purchase requests are reviewed and approved at the appropriate level, sparing you from compliance concerns after the initial setup.
• Punchout catalogs that enable you to establish a marketplace with your preferred vendors, eliminating the need to constantly update price lists or manually extract data from different vendor websites. ProcureDesk integrates with major vendors like ThermoFisher, Fisher Scientific, VWR, and more.
• Purchase order automation that frees up scientists from the task of creating and sending purchase orders, as the system automatically handles this process.
• Purchase order tracking that empowers you to monitor order acknowledgments and advance shipping notices (ASN), providing continuous insight into the status of your deliveries without the hassle of chasing vendors through multiple email exchanges.
• Receipts with lot tracking let you keep a close eye on detailed receipt information, such as the expiration dates of items like reagents.
• Inventory visibility that allows you to track the precise quantity of lab supplies across various locations in your lab.
• Invoice matching that streamlines the reconciliation process by automatically matching invoices with purchase orders, saving time for your Accounts Payable and lab teams.
• E-invoicing capabilities that automatically capture and match invoices from vendors, eliminating the need to import invoices from emails and seamlessly integrating them into your accounting system.
• Robust reporting and dashboards that provide instant insight into your cash flow, helping you understand expenses for each experiment and forecast future costs.
• Mobile app support that ensures you can manage purchase orders and invoices on the go without being tethered to a computer.

Let’s dive deeper into ProcureDesk’s capabilities as a digital procurement platform:

Purchase Requisition Management

The secret to a good purchasing system is to keep the employee requisition process simple.

Instead of just converting a paper form into an electronic one, you want to make it easier for your employees to buy what they need.

With ProcureDesk, employees can request purchases with fewer clicks and less data entry. The system knows who the user is and uses that info to set up default values for things like departments, classes, accounts, projects, and class codes.

Here is an example of how user defaults work:

Budget Management

ProcureDesk has built-in budget tracking and controls to help you manage your budget effectively.

Setting up your budget is a breeze, whether you create it from scratch or import it from a spreadsheet or a system like QuickBooks Online.

Once the budget is established, employees can select the right budget for their purchase.

The system then verifies the budget’s availability and assists in maintaining costs within limits.

You can customize how the system reacts to insufficient budget, such as displaying a warning message or preventing the purchase when the budget is unavailable.

Purchase Approvals

The system handles purchase approvals automatically, so your employees don’t have to worry about figuring out who should give the green light.

You can customize these approvals based on the purchase amount, department, location, and budget owners. Creating your unique approval workflows is a straightforward process.

The system reviews the requisition per the purchase approval workflow and pinpoints the necessary approvers.

All your employees need to do is submit their approval requests.

Once the request is sent, the system informs the approver about a pending request.

The approver can approve directly from their email—no need to log into the system or use the ProcureDesk mobile app for approvals.

Requesters can keep tabs on the status of purchase requisitions via the purchase request dashboard. For instance, they can check which requests are awaiting approval or see if the buyer has already placed an order for a purchase request.

Automated Purchase Order Creation

No need to be concerned about transforming purchase requisitions into purchase orders because automated purchase order creation takes care of it.

This time-saving feature is particularly valuable when there isn’t a dedicated purchasing or buying team.

You can easily determine which suppliers accept purchase orders, and the system handles the rest.

Here’s an example of a purchase order automatically generated by ProcureDesk.

Managing Vendor Information

With ProcureDesk, you have all your supplier details conveniently located in one central hub.

You can keep tabs on vital vendor information, such as vendor tax details, D.B.A. name, delivery locations, and key contacts.

Suppliers can use supplier portals to reply to requests for quotes, monitor open purchase orders, and submit invoices linked to the purchase order.

The supplier portal empowers vendors with self-service capabilities, cutting down on the inquiries received by the AP team.

For instance, a supplier can monitor the status of an open invoice and check the payment status.

Cost Control Dashboard

Are you looking to gain a clearer understanding of your cash flow? The cost control dashboard is your solution.

The Spend management dashboard consolidates all your spending information in one place, offering valuable insights:

• You can easily view your purchases, their sources, and who is making purchases within your company.
• Monitor monthly spending patterns to stay informed about purchasing trends within your organization.
• Analyze payment terms with your vendors to pinpoint opportunities for negotiating more favorable terms.
• Extending payment terms is a crucial strategy for boosting cash flow, but it typically requires a good credit history with your vendor. That’s why transitioning to an invoicing process is essential, as it helps establish a positive credit history with your vendor.

As your procurement operations expand, you may even have the chance to settle vendor payments ahead of the agreed terms, potentially unlocking early payment discounts.

The open order report is a useful tool for tracking your outstanding commitments. This report offers a quick overview of your open purchase orders, what has already been invoiced, and what is pending invoicing.

This information can guide you in making more informed spending decisions.

What Are The Benefits Of A Digital Procurement Platform?

Digital Procurement Platforms can offer your organization numerous benefits to help you enhance your procurement functions.

Let’s dive into a few of these benefits:

Boost Procurement Efficiency

By leveraging automation, a digital procurement system can significantly improve procurement efficiency by eliminating manual tasks and streamlining the entire procurement process.

Automation enables organizations to execute procurement activities faster and more accurately, resulting in increased productivity and reduced processing times.

Improved Accuracy

One of the main advantages of a digital procurement system is improved accuracy.

Through automated data entry and validation processes, a digital procurement platform minimizes human error associated with manual data entry, ensuring that procurement data is accurate, reliable, and up-to-date.

This leads to improved decision-making and better outcomes for the organization.

Enhances Transparency

A digital procurement platform enhances transparency by providing real-time visibility into spending data. It offers actionable insights and analytics, allowing procurement officers to gain a comprehensive understanding of their organization’s spending patterns.

This real-time insight enables better tracking of budgets and contract compliance, leading to more effective spending management.

Increased Cost Savings

A digital procurement platform also promotes cost savings and ensures a positive return on investment (ROI).

By analyzing procurement data and identifying cost-saving opportunities, organizations can negotiate better deals with suppliers, optimize an effective procurement strategy, and ultimately reduce costs.

Additionally, the platform streamlines compliance by automating regulatory and industry rule adherence, ensuring that organizations meet all the necessary legal requirements.

Enabling Process Standardization

Digital procurement platforms can help organizations standardize their procurement processes by providing a central repository for all procurement data and automating tasks such as requisitioning, approval, and purchase order creation.

This can help improve efficiency and reduce the risk of errors.

For example, a digital procurement platform can enforce a standard approval workflow for all purchase orders.

This ensures that all purchase orders are reviewed and approved by the appropriate people before processing them.

Accelerating Integrated Procurement

Digital procurement platforms can help your organization accelerate integrated procurement by providing a central platform for managing all procurement activities, from sourcing to payment. T

his can help to improve communication and supplier collaboration.

Enhancing Visibility And Control

Digital procurement platforms can help organizations enhance their visibility and control over the procurement process by providing real-time insights into spend, suppliers, and performance.

This information can be used to identify areas for savings, improve compliance, and make better procurement decisions.

How Does Digital Procurement Lead To Digital Procurement Transformation?

More and more organizations increasingly use digital procurement platforms to transform the purchasing process.

With digital technologies, it becomes easier to simplify the purchasing process and even collaborate with suppliers.

Let’s dive into the ways digital procurement leads to better procurement transformation for organizations:

Streamlining The Procurement Process

One of the primary ways digital procurement contributes to transformation in procurement by simplifying your processes.

Traditional procurement methods often involve cumbersome paperwork, lengthy approval processes, and manual procurement processes, leading to inefficiencies and delays.

Digital procurement platforms offer a streamlined, end-to-end solution that allows employees to initiate purchase requests with ease.

These requests can then be efficiently routed through approval workflows, reducing manual intervention and speeding up the purchasing cycle. This efficiency not only saves time but also provides a significant boost to productivity.

Enhancing Collaboration With Suppliers

Effective collaboration with suppliers is crucial for successful procurement.

Digital procurement platforms foster enhanced supplier relationships by providing transparent communication channels.

Through vendor portals and supplier catalog integrations, suppliers can interact with organizations in real time, responding to requests for quotes, tracking open purchase orders, and submitting invoices directly against the purchase order.

Such collaboration not only reduces the risk of miscommunication but also opens the door to strategic partnerships and more favorable supplier negotiations.

Improved Data-Driven Decision-Making

Digital procurement generates a wealth of data that can be harnessed for strategic decision-making.

With access to detailed spending data, organizations can analyze purchasing trends, identify cost-saving opportunities, and track supplier performance.

This data-driven approach empowers procurement officers to make informed choices that align with the organization’s goals and objectives.

It also enables better risk management and the identification of potential areas for process improvement.

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