What Are The Pros and Cons of E-Procurement?

The global procurement software market is expected to rake in revenue of about $5.14 billion in 2017. So, should you opt to use a cloud-based procurement software solution for your business needs? The answer to this query depends on your security needs and the industry you are operating in. E-procurement software does offer benefits such as improved flexibility and instant access. However, there are a few downsides. This article details the pros and cons of e-procurement to help you make the right decision.

Pros of e-procurement

1. Improved organization

Many companies are haunted by disorganization as they struggle to place orders and manage purchases according to schedule. This disorganized process can be hard to change and can lead to exceptions. E-procurement is the answer as it can streamline purchasing and also reduce the risk of exceptions in your buying process. Another advantage is you can centralize purchasing.

2. Enhanced control

Online procurement helps you to be flexible in what you wish to include as well as provide access restrictions in an agile manner. With the right e-procurement software, you can limit a host of issues including accepted prices from each vendor, ordered items, selected vendors, and kind of purchases done. By tightly controlling these important elements you can maintain consistency in order times and minimize rogue spending. In addition, the online procurement software can integrate smoothly with your existing systems to boost efficiency.

3. Reporting and reconciliation

A key problem in procurement is mismatch between purchases and invoices. However, this reconciliation issue tends to be pushed in the background as businesses tend to focus on main tasks. Plus, it is difficult to generate reports on procurement as well as gather data on historical approvals using a manual system. E-procurement software can help to resolve this issue as it offers customizable reporting. 

4. Cost saving

You can do proper research and find a cost-effective online procurement software solution. Reliable vendors offer pricing packages that enable you to pay only for what you use and typically there are no user licensing charges or hidden fees. In addition, your employees can save time with this software and spend it productively on important tasks.

5. Fast implementation and updates

The best e-procurement software platforms are easy and quick to implement. You can effortlessly switch over to the system without taxing your IT staff too much. Plus, the cloud vendor automatically updates and upgrades the software on a regular basis, so you don’t have to worry about doing them manually.

6. Integration with existing software

As mentioned earlier, top e-procurement software solutions can integrate seamlessly with your existing business process automation platforms. Many online procurement software vendors also provide modules to streamline financial tasks and handle capital projects. You can select one such provider to ensure all the software tools work together which will make it simpler to implement the e-procurement product.

Cons of e-procurement

1. Micromanagement

E-procurement software tools offer features for detailed data analytics and classification. However, the danger is you can get carried away by the multiple customization options. There may be a high number of fields which can be confusing and could reduce the platform’s reporting efficiency. The solution is to find the customization level that is suitable for your enterprise.

2. Time-consuming approval chains

The benefit of detailed insight can also be a drawback. Your company’s reviewers may get bogged down by it and can take longer to review procurement details and pass them to the next reviewer. Therefore, it is essential to eliminate such bottlenecks to ensure the approval chain does not get blocked.

3. Not ideal for direct materials

E-procurement works best for purchasing catalog-based indirect materials such as office supplies. You are sure to get good ROI for purchases like these. However, e-procurement may not be ideal when purchasing direct services and materials. Therefore, it would not be advisable to use it for negotiating purchases that are part of large and expensive deals. 

4. Supplier onboarding problems

Older vendors may struggle to understand new online procurement software systems. Small businesses can have a hard time updating catalogs and other info with the platform. Therefore, it is important to select tech-savvy suppliers to fully benefit from e-procurement. 


Keep track of the latest procurement trends and apply them in your company to enhance efficiency and productivity.