A procurement tool is software that most businesses use today that allows their procurement team to have better control over their stock, expenditures, and sourcing processes.
The tool is designed to assist the business’s operation, reduce manual costs, minimize admin tasks, and reduce the risks for growing companies. That’s why you must ensure that your business uses this tool to help its operation and reach your goals. With that said, here are tips you can follow to guide you in choosing the ideal procurement tool for your business.
Conduct Research
The first tip that you should do when choosing a suitable procurement tool for your business is to do your research. There are many procurement tool providers nowadays, and each offers various features and add-ons.
When researching, you must gather information regarding possible providers, services, or products that meet your business needs. If you’re already using a procurement tool, you must start your research by determining what aspect of your current software needs improvement.
Doing so will help you understand what services or products you need as your company grows. Moreover, you can narrow your list of procurement tools and only choose from those that can provide you with what you truly need.
If you still haven’t used any procurement software, then you might want to consider assessing the provider’s customer service, the tool’s mobile accessibility, ease of use, etc. These are vital factors that a procurement tool must have to provide you with better service.
Decide What Type You Need
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Procurement tools come in two different types: Cloud-based and on-site procurement software. Both types of procurement tools come with their respective pros and cons. When choosing what procurement software you will purchase for your business, you must also figure out the pros and cons of both options to help you decide.
I have listed the pros and cons of each procurement tool to help make your research easier and more convenient.
Cloud-Based Procurement Software
Cloud-based procurement software allows businesses to store, access, and manage their data online. If you use a cloud-based procurement, the provider doesn’t need to visit your site for installation. You only need to register with their online software and pay for the subscription you want.
Furthermore, cloud-based procurement software offers advantages and disadvantages of usage, such as below:
Pros
Cloud-based procurement tools operate online.
Accessible anytime and anywhere via the Internet.
Allows better collaboration
Offers E-invoicing
Better visibility
Digitization of manual procurement
Cons
Internet connection determines the user experience
Cost can increase without a warning
Can’t be accessed without an internet connection
Your data can be at risk as you can experience data loss, cyber-attacks and breaches
On-Site Procurement Software
An on-site procurement software needs to be installed on your business site. Similar to the cloud-based procurement software, there are also pros and cons that this option offers.
Pros
- It can be operated without an internet connection
- Your data is secured
- You’ll have better control over your server hardware
- Save on internet costs, primarily if your business doesn’t rely on the Internet.
Cons
- Requires you to hire an IT team
- Increase maintenance cost
- You’ll need to provide higher capital investment
- Risk of data loss
- Limits your business growth
Create a List Of Non-Negotiable Features
The next tip you might want to consider when shopping for a procurement tool is listing all the non-negotiable features you want on your software. Since there are many procurement systems, you must expect each to provide different features.
The features that make every procurement tool unique are the following:
- Supplier management
- Audit trail
- Easy setup process
- User-friendly interface
- Communication
- Quick integration
- Barcode scanning and printing
- Efficient workflow
- Budget management
- Planning calendar
- Reporting and extensive filtering
- Work orders
- Policy compliance
- Asset management
Check out these features and select which is vital for your business. All the above features benefit your business, and you might want to have it all. However, you must also consider your budget for this tool, as most providers charge additional fees for add-on features you want to include on your subscription.
Consider The Total Cost Of The Tool
Considering the cost is a vital tip you must follow when choosing software. The reason behind this is that every business has its respective financial capabilities. That said, your business also has its limitations and capabilities regarding finances. You don’t want to spend more than your business can afford for procurement software.
What you must keep in mind is that there is software out there that suits what your business needs. It has the right features vital for your operation and costs just right for your budget. So, never rush to choose the software to use. Take your time and compare a tool's features and prices before deciding which one to purchase.
Choose a Tool With Expertise In Your Industry
You already know that procurement software comes in different types and systems. Therefore, when choosing software for your business, another tip you must keep in mind is to choose the one with expertise in your industry.
Doing so will ensure that everything you need, like features, integration, and setup, will align with your business. When researching, you must also examine the providers' track record and check if they have a proven good track record in your specific industry.
It’s proof that the provider already knows the ins and outs of your industry, making it easy for them to find a solution if a problem arises.
Bottomline
With all the options of procurement tools available today, choosing can be overwhelming, and it’s normal. However, by following the tips shared above, you can decide easily, as it will guide you to the right path. Start your procurement software shopping remembering the tips above.
