Making the Case: How to Convince Your Department to Implement a Procurement Tool

Procurement has grown increasingly complex over the years, largely due to globalization, the diversification of supply chains, and rapidly evolving market demands. This complexity not only heightens the risk of inefficiencies but also underscores the critical need for procurement solutions. Upon recognizing this, procurement professionals often find themselves in a challenging position when advocating for these systems, particularly when addressing IT departments.

In this newsletter, we’ll provide you with compelling arguments to persuade IT decision-makers of the substantial benefits that a procurement tool can offer.

5 Reasons to Choose Procurement Software

When presenting the case for new software implementation, it's crucial to understand the perspectives and priorities of the decision-makers within the IT department. What are their pain points? How do they measure success? By aligning the benefits of a procurement tool with their goals—be it cost reduction, compliance, or transparency—you can speak directly to their interests. Let's explore some benefits of procurement solutions that are likely to resonate with the IT department.

Data Quality and Consistency

Clean and consistent data is the lifeblood of smart decision-making. Unfortunately, organizations often face several data-related challenges. Information can be scattered across multiple systems, making it difficult to access and consolidate. Additionally, there are issues with data being incomplete or missing, which further complicates the ability to use it effectively. 

Implementing a procurement system addresses these challenges. Such systems centralize all purchasing-related activities into one database. This includes comprehensive records of spend data, supplier databases, contracts, item catalogs, and inventory details. 

Moreover, modern procurement systems allow for the creation of detailed reports. These reports can shed light on spending patterns, supplier choices, and potential areas for cost reduction. For instance, Precoro not only boasts its own robust reporting capabilities but also integrates seamlessly with Power BI data visualization software. This integration allows users to effortlessly consolidate and refine data from various sources. It also helps companies to:

• Sync data such as budgets, invoices, POs, and suppliers from Precoro to Power BI.
• Build an unlimited number of interactive reports based on procurement data.
• Categorize and analyze any procurement information from Precoro in your Power BI account.
• View real-time budget spending dynamics.

Security

In procurement, keeping information safe is critical. IT teams focus on data protection to ensure important details like financial records, supplier deals, and company buying habits are not compromised by third parties. If such data gets leaked, it could lead to money loss and a blow to the company's image. Procurement tools help safeguard sensitive information. 

For example, Precoro offers top-tier encryption, role-based access to features, multi-factor authentication, and consistent auditing to ensure that data remains in the hands of authorized users only and that all transactions are securely recorded. Being a cloud-based procurement system, Precoro also mitigates the risk of data loss from local hardware malfunctions or physical disasters. 

Cost-savings

The adoption of procurement automation has increasingly been recognized as a strategic enabler of cost reduction. On average, we estimate that automation helps save 1.5-4% of annual spending through enhanced visibility of buying behaviors and real-time budget transparency. 

Procurement software also provides valuable insights into historical purchases and vendor turnover, which empowers organizations to negotiate better contracts. With critical data at their fingertips, businesses can save money on commonly purchased goods and services year after year. 

Finally, cost savings are passively achieved due to reduced numbers of errors and risks that would otherwise damage the whole supply chain and lead to financial losses.

Integrations

Today's procurement tools are designed to integrate with many common business solutions, like Enterprise Resource Planning (ERP) systems or financial software. Direct connections allow for the smooth flow of data and processes, eliminating the manual effort needed to transfer information between systems. 

For example, Precoro procurement software effortlessly connects with ERP and accounting systems such as NetSuite, Xero, or QuickBooks Online. With Precoro, users no longer need to manually input critical data, such as purchase orders, invoices, and supplier details across separate solutions, as these elements are automatically synced. What's more, Precoro extends its functionality by offering an API for custom integration. This allows businesses to connect Precoro with the specific systems they already use.

Improved User Experience

Managing IT purchases without a procurement system can be quite challenging. IT staff often wrestle with long, complicated forms for hardware or software requests. The wait for approvals, typically via email or phone, sometimes feels like an eternity. Plus, tracking the status of orders is an added hurdle. The whole process creates difficulties not just for requesters but also for purchasing and finance teams.

On the other hand, with a dedicated procurement solution in place, the scenario is much more manageable. Users can effortlessly submit their requests using intuitive, flexible forms and receive timely updates on their status through email or Slack notifications. Moreover, automated, rule-based approval workflows ensure that orders are not only processed quickly but also accurately, streamlining the entire procurement process for all involved.

How to Find Evidence to Support Your Case

Building a case for procurement software investment also involves gathering credible evidence to support the benefits. Here’s how you can find it:

• Case studies and testimonials: Look for success stories from businesses similar to yours. Case studies can provide concrete examples of how procurement software has benefitted other organizations.
• Vendor data: Software vendors often have data showcasing their software's effectiveness. Request information on expected ROI and performance metrics to understand potential benefits.
• Benchmark data: Industry benchmarks can provide a baseline to demonstrate how your current processes compare to best practices enabled by procurement software.
• Free trials/demos: Take advantage of free trials or book demos. Firsthand experience will allow you to see the software's features and understand how it could enhance your operations.
• Review websites: Platforms like Capterra, G2, or GetApp provide user-based evaluations of procurement software. These reviews can offer an objective view of the software's effectiveness and user satisfaction.
• Peer networks: Discuss with peers in your industry who have implemented procurement software to gain insights into their experiences and outcomes.

Educational Materials

To learn about PO numbers in procurement, click this link. 

If you want to learn about the importance of supply chain visibility, refer to this article on our blog. 

To find out about procurement contracts, click the link to our blog post.

If you want to learn about purchase price variance, click here.

To learn about automated invoice processing with OCR, follow the link to our blog.

For a complete guide on IT procurement, check out this material. 

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To see how Precoro can help your organization simplify and improve the procurement process from the ground up, sign up for a 14-day trial or book a demo on our website.