How e-Marketplaces Help Purchasing Agents, Buyers, and Suppliers
These days, of course, it’s possible to purchase just about anything electronically, through one-off online orders. That can save money and time. But implementing a purpose-designed e-procurement marketplace has additional advantages. In particular, it lets organizations effectively manage buyers, catalogs and suppliers. And it benefits everyone involved in the purchasing/procurement process.
The beneficiaries start with purchasing agents. A properly constructed electronic marketplace lets them select specific vendors as preferred suppliers and allows them to establish and enforce rules requiring buyers to purchase from those suppliers. The marketplace can even let the agents control which suppliers and items specific buyers can see when selecting purchases – an important ability, especially when handling security-sensitive products. It can also route purchase requests to managers for approval as necessary. All of this lets agents keep centralized control over both suppliers and prices.
An Easier Road for Buyers
E-procurement software also makes the purchasing process easier for individual buyers. For example, it lets them easily find items they need from the electronic catalogs of approved suppliers, while also letting them compare prices from those suppliers (or request special pricing or products they don’t see offered). It also automates the process of generating and submitting purchase requests. All buyers need do is add items to the shopping cart in the online catalog of the selected vendor, and submit an online requisition for approval. Once the transaction has been approved and processed, the system keeps the buyer informed of factors such as the status of the order, available inventory of the item being purchased, and shipment status.
The electronic marketplace also helps suppliers provide the best service. They can, for example, update and add product information to their electronic catalogs as necessary. They can receive and process electronic purchase orders. They can combine related products into popular packages or sets for convenient ordering. And they can access real-time information about payment status.
Tying It All Together for Transparency
Tying the electronic marketplace into other automated systems brings further benefits. Purchase requests, once approved, can automatically turn into purchase orders. When the order has been filled, the supplier can electronically submit an invoice based on the purchase order to the purchasing company’s integrated invoice management system. The invoice becomes one of many types handled by this system. Such integration extends automation seamlessly from procurement through payment.
This integration multiplies the efficiency of both types of automated systems. The electronic marketplace e-procurement system can set purchasing rules to obtain maximum discounts. The invoice management system then generates payments that meet any terms necessary to capture such discounts. This system also provides reporting capabilities letting purchasing agents analyze the resulting discounts by various criteria. That in turn allows them to modify or update procurement rules to further increase savings.
This reporting capability also lets agents minimize waste and needless expenditures. For example, they can confirm whether the purchasing rules they set up produced the results they expected. It lets them see how many purchases took place off-contract or that otherwise failed to follow procedures. And, if necessary, it even lets them change preferred suppliers mid-stream.