Procurement is about obtaining goods and services, and processing any operations linked to it. Many companies still use traditional procurement operations despite the many issues associated with them.
The Challenges of Traditional Procurement Process Claritum
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Traditional procurement process is characterised by being a slow and time consuming process, as traditional process include many small, repetitive tasks. These tasks could be anything from approval, writing contracts, negotiation and discussion of bids. Phone calls between a buyer and a seller are time consuming and take an average of six minutes.

Furthermore, procurement processes can be financially consuming and expensive. Managing the approvals, invoices and bills is expensive because of the high amount of paper work involved. Furthermore, there needs to be sufficient workforce to manage  the processes, which is costly to manage. Samuel Greengard the author of “The Route to Better Procurement” states that traditional procurement could be costly due to the presence of many ledgers associated with many suppliers.

Procurement is a difficult process to control. This is underlined by the fact that traditional procurement involves many platforms with different players in each one. This makes visibility more blurred, leading to a bigger loss of control and is usually increased by miscommunication between buyer companies and many suppliers involved. Spend control becomes flawed, which could potentially mean further financial burdens.

Companies can overcome these challenges with an E-procurement platform. These are cloud based management platforms that link buyers and sellers into one single platform. A cloud based spend management platform is an efficient procurement system that leads to significant management gains.

The first of these gains is  time savings. An e-procurement platform would scrap any repetitive lengthy operations associated with approval, contracting, negotiation, and discussion and replace them with more automated quick ones.

Jaikumar Vijayan author of “E-Procure System Talks Back in Real Time” states that e-procurement systems are efficient platforms that leads to substantial economic gains. The author states that up to $12 million is likely to be saved.  Samuel Greengard states that up to $14 per invoice could be saved by automating invoices.

An e-procurement platform would improve visibility by consolidating all buyers and sellers into one platform. Suppliers, delivery and financial information would all be stored into one consolidated system. This gives users easier access to the information in the system, information could also be presented graphically in the form of reports, or charts. As well, having a streamlined procurement, sourcing and invoicing in a cloud based platform would lead to visibility and control over every transaction locally, nationally and globally.

Traditional procurement can be time consuming, difficult to control and costly. Yet, these challenges can be effectively swept away through an e-procurement cloud spend management platform that will enhance visibility, control, efficiencies, savings and thus create value.


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