Procurement Management Software: Features, Integrations, Success Factors, Benefits

Procurement Management Software Overview - ScienceSoft

ScienceSoft applies 9-year experience in building supply chain management software and practical knowledge of 30+ industries to help companies implement reliable procurement solutions.

Procurement Software: The Essence

Procurement software streamlines strategic procurement planning, supplier selection and management, automates the creation and processing of purchase documents, enables real-time spend monitoring and analysis, and more. The solution is especially helpful for enterprises with a large number of purchasing categories, complex procurement processes, multiple business entities.

Procurement software can be extended with vendor portal functionality to facilitate supplier onboarding and catalog-based purchasing, and enable quick and smooth supplier communication.

Necessary integrations: ERP, CRM, an inventory management system, a warehouse management system, an accounts payable (A/P) management system, etc.

Implementation time: Around 10 months for custom procurement software.

Development costs: $200,000 - $400,000, depending on the solution complexity.

ROI: Up to 315%.

Procurement Software: Key Features

Strategic procurement planning

  • Procurement demand planning (by category, department, business entity, etc.) based on the analysis of relevant historical data, like:
    • The amount of raw materials used for manufacturing needs.
    • Products and services required to support departments’ work.
    • Sales data reflecting customer demand during different time periods, etc.
  • AI-enabled spend analysis (including cost component analysis, supply market analysis, and more).
  • Trend analysis for spend forecasting (by period, category, supplier, region, etc.).

Supplier selection

  • Setup of supplier requirements (quality standards, sustainability, capacity, delivery terms, etc.) based on the internal procurement policies.
  • AI-enabled supplier pre-qualification against compliance requirements based on data from the questionnaires filled in by the suppliers and public data sources (e.g., a credit rating platform).
  • Automated supplier categorization by user-defined parameters (product or service category, region, strategic priority, etc.).
  • Configurable multi-department supplier approval workflow.
  • Creation and management of preferred supplier lists for various products (based on supplier performance analysis).

Purchase requisition management

  • Template-based generation of purchase requisitions.
  • Catalog-based and non-catalog-based (spot buy) purchase requisitions for products/services.
  • Rule-based assignment of preferred suppliers to purchase requisitions.
  • Automated workflows for hierarchical, parallel, pool purchase requisition approval.
  • Real-time multi-department tracking of purchase requisition approval status.
  • Scheduled reminders to the approvers.
  • E-signing of purchase requisitions by the approvers.

Purchase order management

  • Automated creation of purchase orders (PO) from purchase requisitions or templates.
  • Multi-department PO approval workflow.
  • Automated PO grouping across departments and business entities by supplier to get volume discounts.
  • Automated PO submission to suppliers.
  • Scheduled vendor reminders to confirm purchase orders.
  • Real-time tracking of PO status (sent, confirmed, invoiced, shipped, etc.) by procurement specialists.
  • Tracking the expected PO delivery dates.

Invoice processing

  • Automated two- and three-way invoice matching (against purchase orders and order receipts).
  • User-defined thresholds for invoice matching tolerance for price, total value, quantity, etc.
  • Invoice tax amount verification according to the pre-set rules.
  • Multi-currency and multi-language invoice support.
  • Alerts on invoice exceptions (missed, mismatched or inaccurate data, duplicate invoices, tax variances, etc.) that require manual handling.
  • Automated invoice routing for payment.

Purchase document storage

  • Centralized storage of purchase-related documents (purchase requisitions, PO, invoices, etc.).
  • Automated linking of purchase invoices to relevant PO and purchase requisitions.
  • Search engine with filtering and metadata querying to navigate purchase documents.

Catalog management

  • Creating catalogs of products and services provided by the pre-approved vendors.
  • Configurable catalog hierarchies.
  • Automated approval workflow for added/updated catalog items.
  • Comparing product and service items across multiple catalogs by user-defined parameters, such as price, features, delivery date (for procurement specialists).

Spend tracking

  • Real-time tracking of spend amounts (by period, SKU, category, supplier, department, location, project, etc.).
  • User-defined spend thresholds (by period, category, location, etc.).
  • Alerts to the procurement team on procurement expenses nearing/exceeding the pre-set limits.
  • Calculating and tracking spend variance against pre-set budgets (on the enterprise/department/project level).

Supplier performance monitoring

  • Supplier performance analysis against pre-defined KPIs, such as percentage of purchase orders delivered on time, average delay in purchase order execution, the number of back orders, and more.
  • Real-time supplier risk monitoring based on internal and public data sources.
  • Assessment of reputational, financial, operational, and other risks.

Analytics and reporting

  • Tracking essential procurement metrics (by period, business entity, region, etc.), such as:
    • Spend metrics (e.g., total spend amount, spend vs. budget, spend under management).
    • Savings metrics (e.g., cost savings via volume discounts or early payment discounts).
    • Category level metrics (e.g., number of suppliers in category, average payment time per category).
    • Average procurement/PO cycle time.
    • The ratio of disputed invoices to total invoices.
    • Cost per invoice/PO, and more.
  • Customizable templates for scheduled/ad-hoc reports on procurement KPIs.

Vendor portal (for e-procurement)

For a procurement team:

  • Creating and managing product and service catalogs, catalog-based purchase requisitions and PO directly in a portal.
  • Uploading purchase invoices from a portal.
  • Automated linking of PO and invoices to the supplier profile.
  • Instant messaging tools to communicate with suppliers and sub-suppliers.

For vendors:

  • Vendor self-registration, editing and updating essential business information.
  • Uploading and updating product and service catalogs.
  • PO tracking and confirmation.
  • Invoice creation, submission to customers and tracking by status (sent, paid, partially paid, etc.).
  • Uploading and updating order shipment data.

Security and compliance

  • Multi-factor user authentication.
  • Permission-based access for various user groups, including CPOs and CFOs, purchasing managers, category managers, financial managers, A/P managers, procurement analysts.
  • Intelligent fraud detection.
  • Comprehensive audit trail for all procurement-related activities.
  • Supplier data retention and deletion policies.
  • Compliance with SOX, SOC 1 and SOC 2, WTO regulations, FAR (for federal government procurement in the US), Peppol (for eProcurement in the EU), other relevant region- and industry-specific regulations.

Power Procurement Management with Robust Software!

ScienceSoft’s team is ready to plan, build, and support an effective procurement solution to streamline strategic procurement planning, speed up processing of purchasing documents, and limit the risk of off-contract spend.

Essential Integrations for Procurement Software

Essential Integrations for Procurement Software - ScienceSoft

Procurement software + ERP

  • For accurate demand planning.
  • For operations and strategic planning.

Procurement software + inventory management system

To trigger automated creation of purchase requisitions, POs.

Procurement software + CRM

For accurate customer demand forecasting.

Procurement software + warehouse management system

For automated invoice matching.

Procurement software + accounts payable management system

  • To accurately record PO and purchase invoice transactions in the A/P ledger.
  • To pay purchase invoices.
  • For accurate spend analysis and forecasting.

Procurement software + financial planning and analysis software

  • To enable automated calculation of spend vs. budget ratio.
  • For accurate financial planning.

Procurement software + BI solution

For facilitated analytics and reporting of procurement insights.

Success Factors for Procurement Software

Maximized automation across the purchasing cycle

To eliminate manual time-consuming procurement tasks, such as purchase requisition generation, multi-way invoice matching, spend variance calculation, catalog updating, etc.

Advanced data analytics

To enable data-driven, accurate procurement planning and spend optimization to timely meet the demand and reduce procurement costs.

Mobile access

To manage purchase requisition creation and approval, PO status tracking, invoice exception handling, and other procurement tasks on the go.

Easy-to-use APIs and connectors

To streamline procurement software integration with essential enterprise systems (ERP, inventory management software, warehouse management software, an A/P management system, etc.).

Procurement Software Implementation Costs and Financial Outcomes

Procurement software implementation costs vary from $200,000 to $400,000, depending on the solution complexity.

With procurement software, you can reach 315% ROI, based on the Total Economic Impact™ Study.

Benefits of procurement software

  • Up to 100+%

    maverick spend eliminated due to facilitated adherence to the established procurement policies

  • 80%+

    manual procurement tasks automated

  • 90%

    faster purchase requisition approval due to rule-based multi-department approval workflow

  • 75%

    faster PO processing due to automated PO generation and submission to vendors

  • 75%

    faster invoice processing due to automated multi-way invoice matching

  • 25-40%

    procurement cost savings due to AI-powered analysis of spend and savings opportunities

  • Top Off-the-Shelf Procurement Software ScienceSoft Recommends

    SAP Ariba Buying and Invoicing

    Best for

    Managing multi-entity procurement activities.

    Description

    SAP Ariba Buying and Invoicing allows for simultaneous integration with ERPs of various company subsidiaries and branches for multi-entity procurement management and real-time multi-entity spend tracking. It provides multi-currency and multi-language support to process international procurement documents, advanced catalog management, as well as the instant messaging capability via SAP Ariba Network for easy communication between procurement teams and suppliers.

    Pricing

    Upon request to a vendor.

    GEP SMART

    Best for

    Comprehensive procurement analytics.

    Description

    GEP SMART enables AI-powered spend analysis (by supplier, category, region, etc.), intelligent recommendations on the optimal suppliers and buy-pay channels, and provides BI tools for advanced visualization of procurement analytics. It offers a native mobile application to manage procurement processes on the go and seamlessly integrates with many popular ERPs and accounting systems (SAP, Oracle, Microsoft Dynamics, etc.).

    Pricing

    Upon request to a vendor.

    Basware e-Procurement

    Best for

    International supplier collaboration on e-procurement.

    Description

    Basware e-Procurement provides procurement management and vendor portal functionality, enables the creation of internal catalogs and easy access to supplier-managed catalogs. The software offers connection to 2M+ buyers and suppliers via Basware ecommerce network to allow for collaborative procurement from pre-qualified vendors. It supports compliance with tax regulations in 50+ countries, various e-procurement protocols and e-document formats (IDOC, cXML, UBL, Peppol (for the EU), etc.), and enables seamless integration with 250+ world’s leading ERPs.

    Pricing

    Upon request to a vendor.

    When to Opt for Custom Procurement Software

    ScienceSoft recommends building a custom procurement solution in the following cases:

    You operate in highly regulated industries (e.g., healthcare, defense, government sector) and need a procurement solution to meet specific compliance and security requirements. For example, in our project for the US hospital system, we developed a custom procure-to-pay solution fully compliant with HIPAA regulations.

    You need to automate complex, non-standard procurement processes based on your company’s specific procurement policies.

    You have large teams involved in procurement and want to avoid a considerable subscription amount for platform-based procurement software, which scales with the number of users.

    You need a flexible procurement solution that is easy to evolve with new functional modules (e.g., comprehensive AI-powered procurement analytics) and trending technologies (e.g., cloud, blockchain) when required.

    Implementation of Procurement Software with ScienceSoft

    In supply chain management software development since 2012, ScienceSoft helps companies build reliable procurement solutions.

    Procurement software consulting

    • Analysis of your procurement management needs.
    • Design of optimal features, architecture, and tech stack for the procurement solution.
    • Preparing an integration plan with ERP, CRM, an inventory management system, an A/P management solution, etc.
    • Implementation cost & time estimates, expected ROI calculation.

    Procurement software implementation

    • Procurement management needs analysis.
    • Procurement solution conceptualization.
    • Architecture design.
    • Procurement software development.
    • Integrating the solution with existing corporate systems (ERP, CRM, an inventory management system, an A/P management solution, etc.).
    • Quality assurance.
    • User training.
    • Continuous support and evolution (if required).

    About ScienceSoft

    ScienceSoft is an international IT consulting and software development company headquartered in McKinney, Texas. We provide consultancy and development services to help organizations build effective procurement software tailored to their procurement management needs. Being ISO 9001 and ISO 27001 certified, we apply a mature quality management system and guarantee that cooperation with us does not pose any risks to our customers’ data security. If you are interested in developing a reliable procurement management solution, turn to ScienceSoft’s team for custom procurement software.