For any company in any industry, procurement management is an essential practice for safeguarding effective and efficient operational processes. Procurement management is a strategic approach that is widely used in the business landscape to manage and optimize the process of acquiring products and services from another firm, and as a result, minimize the organizational spend. Considering the importance of having everything you need at the right time and at the right place, smart procurement management practices are vital for your organization’s performance and long-term success.

Key elements of a successful procurement management

  • Planning. A comprehensive procurement plan must be in place before the procurement management process is rolled out. The plan should be specific and detailed enough, encapsulating timings, budget and an overview of the work to be done. Although you should allow some flexibility, you should nevertheless keep in mind your initial procurement plan in order to avoid any errors, omissions or duplications.
  • Supplier Selection. Another important element of successful procurement management is the selection of your suppliers. It is vital that you make enough research to identify and select the best suppliers that match your company’s goals and objectives. Ensure that you take into account different variables, such as costs, vision, response time and availability, health and safety measures, support, quality control and delivery times.
  • Ongoing Control. Nevertheless, your work doesn’t stop at the moment when you agree on a contract with a supplier. It is important that you are constantly monitoring and evaluating your supplier’s performance across various dimensions, such as the products’ quality, the delivery times, the support offered and so on. Regular weekly/monthly/annually meetings with your suppliers are highly advisable in order to keep close contact with them and make them aware of what you are expecting from them.
  • Evaluation. This is a highly important element that is often overlooked by many companies. The entire procurement process must be thoroughly and regularly examined and assessed against Key Performance Indicators (KPIs). By shifting your focus to the evaluation and assessment of the procurement process, you can look into any problem areas that need to be improved or changed. This way, you are preventing bigger problems from occurring and as a result, you are aiding in the overall long-term success of the entire procurement process.

Why it’s important to digitize your procurement management process

Without a doubt, keeping everything manual requires a significant amount of time, effort and resources. Although this might be okay for smaller sized firms, it starts to become a major problem as the organization grows and expands. If this is the case, it is important to consider digitizing your procurement management process. It definitely has a lot of benefits to offer, including:

  • Significant reduction in omissions and mistakes caused by human error
  • Reduction in processing times and improved efficiency
  • Reduction in costs and enhanced spend management
  • Easier and faster monitoring of your organizational spend
  • Enhanced information preservation.
  • Elimination of space used for paper storage and reduction in off-site document storage fees.