The Impact of Cloud Computing on Procurement

With the arrival of cloud computing, organizations have started to spend less on complex computing infrastructure and shift to the cloud that offers advanced services more conveniently on a pay-as-you-go model.

What is Cloud Computing?

Cloud computing refers to the on-demand availability of services, especially data storage and processing power, without the user having to manage them directly. The objective of cloud computing is to make computer resources and IT services more accessible and scalable. Such properties of cloud computing help organizations to easily adopt cloud in the form of Infrastructure as a Service (IaaS), Platform as a Service (PaaS) or Software as a Service (SaaS).

The cloud allows you to save data and applications via the internet in its most basic form rather than downloading them to your computer’s hard drive. Simply said, if you have an internet connection, you may access information stored on the cloud at any time and from any location.

How Has It Impacted the Procurement Function in Organizations?

While working with the traditional all-in-one procurement software, companies quickly realized that their dreams of unrivaled simplicity and improved productivity were far from turning into reality.

Soon they realized that a cloud procurement system that addresses issues one at a time can overcome the constraints of a complicated procedure. Let’s take a look at some of the benefits of procurement automation using cloud-based procurement solutions.

Cost Efficiency

Apart from cutting down hefty investments, Cloud-based Procurement Solutions streamline the end-to-end procurement cycle that significantly lowers operational costs. It enables the procurement staff to maximise the usage of available resources more appropriately, handle purchase requisition forms efficiently, eliminate duplicate orders, and keeps track of all the expenses, thereby improving the overall cost efficiency. Additionally, with the help of real-time data and integrated dashboards, the procurement team can make timely decisions which, later on, helps them avoid costly indiscretions.

Seamless End-to-End Integration

With the help of cloud procurement software, a wide range of processes, apps, networks, databases, and other IT systems are interconnected, enabling the procurement staff to upload, download, view, and share data and reports via a single platform.

Improved Supplier Relationship Management

Cloud-based Procurement software provides for a more efficient and structured approach that will assist you in controlling expenses, choosing the best suppliers, enforcing corporate policies, and assessing supplier risk. Hence, paying the suppliers in time and improving your organization’s relationship with the supplier.

What Does a Cloud-Based Procurement Solution Consist Of?

Since organizations tend to think that cloud-based procurement software might have fewer functionalities, the geniuses behind the designing of cloud procurement software merged all the necessary procurement functions while eliminating the rest. Let’s see what cloud-based procurement solution consists of:

• Supplier Management: Shifting to a cloud-based procurement software comes with an extensive supplier qualification system that significantly improves compliance, increases transparency, and promotes data accuracy.
•  P.O and Invoice Automation: Whether traveling or at home, cloud procurement software helps in generating purchase orders and Invoices from any device within a few minutes, which keeps the purchasing process efficient.
• Spend Analysis: With the procurement cloud solutions, all the indirect expenditure incurred for raw materials, services, and miscellaneous items can be tracked and analyzed and can help in cutting down unnecessary costs.
• Contract Management: Cloud computing enables tracking previous purchasing success and patterns with different suppliers, giving you leverage when negotiating future contracts.

Why the Cloud Holds the Future of Procurement Management

Cloud computing enables new ways of interaction and collaboration in procurement, allowing advances in purchasing, supplier relationship management, and the whole purchase-to-pay system. Organizations will keep adopting cloud procurement software in the future because of its following versatile features:

• Flexible Functionality

Cloud procurement software is easy to use and flexible, unlike traditional procurement software. Its flexible nature allows it to modify according to the market, saving time and cost.

• Scalability

Cloud-based procurement software is easily scalable. If you want more functionalities, storage, or new updates, you can quickly increase your subscription plan.

• Meeting All Expectations Set by the Customer

Since cloud procurement software is a complete package with all required services, it helps keep the customer satisfied by offering everything they need.

• Updates – Stay up to Date on the Fly

For traditional procurement software, organizations must pay up a significant initial investment to purchase the system and then spend maintenance costs to keep it updated. With the fast pace of technological advancement, these systems can become obsolete in no time. While in cloud procurement software, updates take place themselves and without any hustle.

No doubt, it is high time for organizations to start developing their cloud procurement strategy and adopt the best cloud procurement software that can solve all their procurement problems in no time.