Digitising and automating the Procure to Pay cycle should be top of mind for procurement leaders no matter the market sector they represent. Especially when navigating through uncertain times, it can give organisations the advantage to remain competitive in the market.
The topic of implementing a procurement software solution into big corporations has been largely discussed and it’s become quite obvious that for a company to have a world-class procurement function that generates cost savings it’s a must have.
What about fast-growing corporations and the mid-market sector? Many innovating leaders in this market sector have already embarked on a digital transformation of their procurement function, while others remain reluctant to the idea.
In this 2-part blog series we are going to shed some light on how mid-market companies can benefit from an e-procurement system, the challenges the mid-market sector is facing and the particularities of implementing an e-procurement solution into fast-growing mid-market businesses.
Why mid-market companies should implement an e-procurement solution?
Many companies in this market sector are fast growing businesses, which means generating profit, reducing costs and taking actions that enable growth is quite up on their agenda. However, many of those companies will have old, outdated systems that are not helping them realise their goals and ensure a compliant end to end procurement process.
Because cash flow can be often limited for mid-market companies, an e-procurement system can make a huge difference in paying your suppliers on time and benefiting from early payment discounts which overall leads to a better supplier relationship.
An important aspect to consider when implementing an e-procurement system is whether the new system is scalable and can grow together with the organization. Ideally you would want to implement an e-procurement system at an early stage of a company’s growth and maintain that system throughout your journey.
It’s very common for companies to make do with the systems and processes that are already in place. Why fix something that doesn’t seem to be broken? However, oftentimes issues such as ineffective contract management and supplier management can be highlighted during external audits.
In managing the relationship with your suppliers an e-procurement system is a great way to ensure an ethical supply chain for your organisation, and ensure you are an ethical supplier to your customers. Many times, mid-market businesses are in fact suppliers to large enterprises and need to comply with their values in order to remain a preferred supplier.
Lastly, another important aspect for mid-market companies to consider when implementing a procurement system is related to the issues caused by maverick spend and tracking this type of spend.
E-procurement systems have a build-in approval processes to avoid maverick spend and help organisations benefit from the preferred supplier discounts that they worked hard to negotiate.
Stay tuned for part 2 of this blog series as we explore the challenges of initiating such a project in the mid-market and the particularities of running an e-procurement implementation in this market segment.