Not all business decisions pan out the way you expect them to. Even your choice of technology goes awry sometimes. It’s an all-too-common feeling to purchase what seems like the perfect software, only to realize quickly that it is going to make your work even harder.
These situations can spell major trouble for departments critical to operations such as procurement. The array of choices with procurement apps doesn’t make the decision any easier. It’s all too easy to go down the rabbit hole, and end up wasting time looking for the solution and exploring options.
Is your current procurement software the best solution for your business needs? Do you know how to tell if you’ve made the wrong choice?
Signs your procurement software isn’t right for you
If you’ve seen the following issues persist after implementing procurement software, you may need to reconsider your choice.
Chaotic procurement workflow
Automation is meant to streamline and simplify processes. Ill-suited software usually ends up introducing needless complexity. If your processes are not straightforward, you may need to evaluate the role your software plays.
Lack of time efficiency
One of the promises procurement software makes is saving time. However, if the software you’ve implemented is increasing the time processes take, it is clearly unproductive. Sometimes, it’s evident right at the beginning, what with long setup times and heavy employee training required.
Time efficiency should ideally start right from the implementation stage. Applications that are not intuitive are likely more laborious to use.
Needs external expertise
Code-heavy software necessitates programming knowledge, which business users may not possess. Purchasing such software eventually leads to the need to hire external consultants to help navigate implementation and usage. Procurement applications that lead to more costs are ultimately counterproductive to your organization.
In order to evaluate ROI accurately, KPIs need to be observed over a period of time. If you’re not seeing faster approvals, higher efficiency, greater productivity, and reduced costs, the software or its implementation may need to be reconsidered.
Haphazard document management
Documents such as contracts, invoices, records, and requisitions need to be meticulously maintained especially in large organizations. If the procurement software you’re using doesn’t facilitate effective storage and easy retrieval of records, it will frustrate your employees and set your processes back.
Mismanaged supplier performance
When in-house processes are chaotic, it’s hard to keep track of supplier performance. This makes it hard to get value out of your deals with suppliers.
It’s also an unpleasant experience for suppliers to work with unorganized buyers and overly complex processes.
When your software doesn’t integrate easily with apps already in use, you’re forced to use other apps, creating a snowball effect that eventually leaves you buried in an application avalanche. It necessitates switching back and forth between multiple apps, eventually cutting deep into productivity.
On-premise legacy systems that don’t facilitate mobility are not sustainable if you wish to grow. They hold employees back from optimum productivity and cause greater delays and bottlenecks in processes. Locally hosted data can make the organization more susceptible to downtime, which in turn can jeopardize process performance.
The ideal procurement software
You may be wondering what the right procurement software would feature. For starters, ensure that your procurement software has the modules your organization needs.
Most companies need five major modules. First, a purchase requisitions module to manage requests that could be flowing in on a daily basis from multiple teams, particularly in large organizations. This module is ideal for streamlining and tracking requests.
Second: a purchase orders module. These external documents need to follow a specific standard for accuracy and compliance. They are issued and executed in a predictable flow. The module tracks the process from start to finish.
Three: An invoice approvals module to help companies keep track of receipts, invoices, taxes, shipping, and so on.
Four: A contract management module helps maintain records meticulously and facilitate greater compliance with regulations.
The last module for vendor management is one that can identify errors and bottlenecks to enable smoother supplier relations.
All five of these modules share the same information, so using master data and integrating the processes is important. Furthermore, there are some parameters that good procurement software will meet, such as:
- High degree of customization
- No-code cloud-based platforms with intuitive design
- Three-way matching (matching purchase orders against requests and invoices)
- Hands-off automation
- Easy integration capabilities
- Smart dashboard for powerful reporting and insights
- Transparent pricing models
- High quality support team
With procurement software, it is easy to fall for the sunk cost fallacy when the investment decision begins to look less than sound. It’s critical to know when to cut your losses and identify a procurement application that is well-suited to meet your organization’s process requirements.