Why is the Cloud now required in procurement?

procurement ; cloud
March 12th, 2020
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Procurement departments have been digitalising their processes over the last few years. This long-term investment is beginning to pay off. Procurement departments in the majority of medium and large companies now have plenty of digital resources at their disposal.

However, they appear to have reached a plateau. The e-procurement solutions put in place are often too disjointed, expensive to maintain and unlikely to advance. This is why migrating to a unified cloud-based information system is highly relevant for procurement departments.

By adopting a cloud-based e-procurement platform, procurement departments can expect to see a return on investment in three different areas:

Choosing a cloud-based platform enables procurement departments to be more efficient

Automating processes

For procurement departments, the initial benefit [1] of a cloud-based e-procurement  platform is that it accelerates and improves the reliability of operations. With the solution handling time-consuming, low value-added tasks, availability within the team is increased, allowing them to be more involved in analysis and take on an advisory role to other company departments. 

Remote working in real time

The ability to approve an investment project remotely or view outstanding balances on your mobile just before a meeting is clearly a strategic resource for procurement departments.

The Cloud gives users two options:

  • To interact with the e-procurement platform any time, anywhere, using the most suitable device for the situation [2]. 
  • To access the information they require in real-time and in the most appropriate format for processing.

Improving the customer experience

The increased efficiency resulting from the adoption of a cloud-based e-procurement platform extends beyond the procurement department. Each company department involved in the supplier invoice payment chain also benefits from the fluid and intuitive approach offered by cloud-based procurement solutions. This includes the stability of the chain.

More unexpectedly, company customers can also find their account using a procurement platform in the Cloud, precisely thanks to the stability of the value chain. For example, they are able to access information about components or finished products more easily, in addition to instructions for use, allergen information, origin etc. 

Choosing a cloud-based platform gives procurement departments a stronger position in the company's strategy

Keeping pace with the company's development

A cloud-based e-procurement platform strengthens the agility of procurement departments (. It is therefore easier for departments to adjust their processing capacity in line with changes in the company.

The scope of this agility is twofold:

  • The volume of operations: The Cloud allows procurement departments to increase their bandwidth as needed, to absorb a peak when searching for new suppliers or when analysing existing contracts, for example.  
  • Operations area: The modular nature of a cloud-based e-procurement platform makes it easy to expand the geographic scope of a procurement department when creating a new entity, for example.

Increasing collaboration between departments

A cloud-based e-procurement platform gives procurement departments the option to introduce approval workflows to accelerate cross-departmental processing. For example, this would apply to:

  • Departments approving the quality of suppliers
  • Purchase requests

Having strategic data available to influence decision-making

A cloud-based procurement platform is enhanced by artificial intelligence and big data. For procurement departments, this abundance of data and the associated capacity to process it quickly and appropriately offer a real advantage when it comes to fulfilling their role in assisting decision-making.

Choosing a cloud-based platform saves procurement departments money

Phasing out investments in infrastructure

Moving a procurement management solution to a SaaS model makes any physical architecture within a company obsolete, as it is hosted in the Cloud instead.

No longer having an infrastructure allows organisations to save money in several areas:

  • Hardware investment: servers, networks etc.
  • User training
  • Hardware maintenance
  • User support

Adjusting procurement operations processing costs using variables

At the same time, subscriptions mean that procurement departments are able to make a greater contribution to a company's competitiveness. Investing in licences changes expenditure (CAPEX -> OPEX) and the IT budget is more predictable. New resources provide opportunities for investment in the organisation's core business.

In conclusion, the value of procurement departments taking an interest in cloud-based e-procurement platforms is clear. SaaS access:

  • Accelerates production.
  • Promotes collaboration.
  • Allows the company to release additional resources for growth and innovation.

Once the concept of the Cloud has been accepted, the next step is to choose a hosting arrangement. Private cloud? Public cloud? There are advantages and disadvantages to each option. Consideration of the business as a whole is essential.

If you have already started using the Cloud in your procurement department, do you know about all the plug and play technologies available to enhance your e-procurement platform? If you would like to find out more about these tools, take a look at the following article: "Three next-generation procurement tools that you need to know about"


[1] "ePayables Technology Advisor 2019 " — Ardent Partners

[2] ATAWAD: Any Time, Any Where, Any Device

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