Procurement teams in every industry face the same challenge: They need to figure out how to better manage the procurement and supply processes so as to reduce expenses and maintain healthy cashflow—all while delivering exemplary products and services to their customers.
This has traditionally been easier said than done. However, thanks to the evolution of document management systems and modern procurement software in recent years, the procurement process has remarkably become easier to optimize. You just need to have the right tools at your disposal.
The key difference between document management systems and procurement software is that the former has a focused purposed on managing all of your organization's documents and is static while the latter assists with the entire procurement process from purchase order to approval workflows and accounts payable. Organizations need both systems in place and they should be integrated to allow the procurement software to access all company documents.
Historically, document management systems have been built with a single purpose in mind: to help organizations store and archive their documents—nothing more, nothing less. This functionality is certainly beneficial in the fact that it enables you to easily track digital documents and records across the organization. But in many cases, the benefits of document management systems stop there.
Instead of opting to go with a document management system, many teams are deciding to give software specifically designed for procurement a try. Generally speaking, procurement software is much more versatile than a standard document management system. Not only can you track records, accounts payable invoices, purchase orders, documents, and more across the organization, employees can also read, edit, and collaborate on these kinds of files—even from their own mobile devices.
What’s more, top-end procurement software is designed in such a way that enables a number of integrations—including document management functionality. Such platforms also have automation capabilities, reporting and oversight features, and automatic notifications, giving teams even more control over the entire procurement process.
Additionally, modern procurement software also has built-in features that help companies make sure that they remain in compliance with any laws or regulations that apply to them specifically. After the Sarbanes–Oxley Act of 2002 (SOX) became the law of the land in the wake of the Enron and WorldCom scandals, for example, public and private companies alike were forced to deal with a number of new regulations—which critics have argued discourage businesses from taking risks. Despite that, the law remains on the books, and businesses that wish to keep their doors open need to comply with it.
Now, instead of shifting accounting responsibilities to lower-level employees, SOX forces those responsibilities to fall at the feet of C-suite executives. With the right procurement software in place, however, companies don’t have to worry about manually assessing whether they are in compliance with laws like SOX—much of it is automated. For example, security features can automatically prevent unauthorized expenditures, giving both executives and procurement managers the peace of mind that comes with knowing there are mechanisms in place to increase the likelihood everything is done by the book.
At the end of the day, however, neither a document management system nor procurement software is sufficiently ideal by itself—assuming companies want to make procurement as efficient and cost-effective as possible. Instead of relying on either kind of solution on its own and subsequently deciding to focus on how to cope with its shortcomings, procurement teams would be wise to look for platforms that are robust right out of the box—like packaged software or a SaaS product—while also being customizable enough to meet specific workflows and unique business needs.
This kind of hybrid platform enables companies to leverage the best of both worlds. Right away, you get a strong software suite that provides the baseline support you need to keep track of your procurement process. But since every company is different, you can’t expect an out-of-the-box solution to meet your needs perfectly. This is where the customizable piece of the puzzle comes into the equation. Spend some time tweaking your procurement software to your specific needs and you’ll get that much more control over the entire procurement process—which means you can optimize it that much further.
The end result? A more efficient approach to procurement, a more satisfied customer base, and—perhaps most importantly—a healthier bottom line.