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The Evolution of Procurement

If you are a small business you’ve probably noticed an evolution of the procurement processes over the past few years. Maybe you have participated in these changes each step of the way, maybe you started and didn’t continue or maybe you are still trying to catch up. Ask yourself where you are in this process and where you want to be.

There is the tried and true paper-based procurement system. There are so many problems and pitfalls to this setup. You’ve experienced them or maybe you are still dealing with these right now. It is time consuming and filled with piles of paperwork. Things get lost, confused, and shuffled around before being found again. Everything is hard. Tracking is hard. Measuring data is hard. Maverick spending can be a nightmare. This is often the go-to method for new and small businesses because of the ease of putting it into place and low cost of setting it up. Get some requisition forms and POs and you are good to go. But the long-term use, especially as the business grows, can lead to many challenges and frustrations and there is also a high cost associated with the inefficient processes.

Next is a software solution. You’ve got out-of-the-box solutions and customized systems installed on servers in your business location. Though a drastic improvement over the paper-based systems, this is not without its challenges as well. The initial capital expense of putting a software solution in place can force businesses back to paper systems for a little while longer. IT people may need to be involved, outside providers, additional training, additional equipment, and you name it there is likely a need for something else to get it all working. And then once you finally have the software set up and people trained, guess what? It’s time for an upgrade which is additional expense, training, and bringing people out to your location to service the software and install updates. It’s not uncommon for businesses to find themselves stuck on some level of software that with time is developing its own issues and not meeting the needs of the growing business. But to upgrade would require additional time and money that may not fit into the existing cash flow plan. So nothing happens and you limp along with a dated software system, reminding yourself that it is still better than paper or you better keep using it to get your money’s worth.

Finally, we have Software-As-A-Service, or Saas. By utilizing the cloud, your business can participate in a subscription-based plan that will give you access to exactly what you need, nothing more and nothing less.  With all the software being web-based, there is nothing on site to install, upgrade, or maintain. Updates are deployed automatically and your solution is scalable, both up and down, to meet whatever your current needs are at the time. Integration into other systems makes this an even better solution.

So ask yourself again, where you are in the evolution of technology surrounding purchasing and where you want to be.




September 12, 2013
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BY Bellwether
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