Should I put my Procurement processes in the Cloud? (article) Claritum

Contents

1Introduction

This article looks at the benefits of moving your procurement processes and activities into the Cloud. Focusing on the Cloud aspect specifically and benefits that are realised with moving into the Cloud.

The article briefly covers each point. If you are interested to find out more please feel free to reach out. Contact Us.

2Keeping up to Date

Any software solution involves updates and changes to provide the latest capabilities. To ensure that a business benefits from these, the software needs to be regularly updated. Plus, from a security perspective, it is essential that software is kept up to the latest version.

With Cloud based procurement, the latest versions of procurement applications needed to run the business are made available to all, as soon as they’re released.

Immediate upgrades put new features and functionality into users’ hands to make them more productive. What’s more, software enhancements are typically released more frequently. This is in contrast to home grown or purchased software that might have major new releases only once a year or so and take significant time to roll out.

3Costs

 

Typically the costs of cloud software are much more flexible than traditional methods. Companies only need to subscribe – and thus only pay for what they are using or need.

Upgrades are usually included in the monthly fees for cloud based software, so there are no sudden substantive increases in costs.

Plus, because companies don’t have to purchase equipment and build out and operate the application within a data centre, they don’t have to spend significant money on managing the application, facilities, utilities and other aspects of operations associated with the application.

4Speed of Deployment

Cloud based procurement solutions can be rapidly deployed, with no local installations or support required. Deploying to offices and onboarding suppliers at your own pace and allowing users to adopt parts or all of the software capabilities available to them: supporting a gradual introduction of new functions, access rights and capabilities across your organisation.

5On Demand Procurement

You could also use a Cloud service as a supplemental system to a strategic purchasing system. Covering Indirect or sub sets of Indirect spend and managing these within the Cloud. Enabling all users to buy low value frequently purchased items, from pre-approved suppliers, without the need to involve the procurement function or need to have access to the Strategic spend platform.

Plus, you do not have to force users to use complex purchasing processes, associated with these Strategic spend platforms, or make costly adaptations to these platforms to address non-strategic spend. You can, though, use these more complex solutions to store master data and handle user access rights, if this makes more sense within your organisation.

6Access Speeds

Cloud services have the advantage of on tap capacity, so that users do not experience slower response times at peak hours.

7Reliability

Cloud software is extremely reliable, maintaining 99.99% uptime. The connection is always on and as long as users have an Internet connection, they can get to the procurement application from practically anywhere. This also means that disaster recovery is greatly simplified.

8Security

Many organisations falsely believe that Cloud based services are less secure. In fact the investments that the Cloud hosting providers make, in securing your data and access, is orders of magnitude greater than any individual organisation can make. The Cloud hosting provider’s whole business model relies on securing their systems.

It is also the case that to secure all of your own systems, and ensure that employees are not inadvertently breaching this security, is costing your organisation increasing larger sums of money that may not be sustainable. Ask the question, could procurement, or aspects of procurement, be moved into the Cloud? Or should I look at virtual data room reviews to see if a VDR can provide a more secure service?

9Improved Mobility

The procurement application and the data associated with the application is available anywhere. Using portable devices and browsers users can roam anywhere and support the business from multiple offices, customer locations or home for example. Secure access being provided and managed by the hosted service provider.

Thus, enabling users throughout an organisation to make, initiate or approve their critical purchases, wherever they are. Using the standard systems and processes of the organisation.

10Improved Collaboration

Collaboration is made possible by allowing groups of people to work on the same project and easily share information in real time. Multiple buyers can access a single project to bring their expertise into the buying of specific items – creating a Multi-buyer souring event(Note: this may not be supported by all solutions on the market.)

Collaboration, also means supporting approvals for purchases by including the approver into the collaborative process. Any approval steps being managed as an automated process: if approvals are required the approver is involved, whereas for lower value items these can be processed directly. Note: simple remote access for approvers is often a mandatory requirement.

11Mergers & Acquisitions

Two companies can become one much faster and more efficiently if they can rapidly combine their purchasing processes. Migrating applications and decommissioning/ commissioning data centres associated with mergers can be both time consuming and costly. Migrating an organisation onto an existing Cloud based Procurement solution is a lot quicker and can bring expenditure control rapidly under the acquiring organisation and reduce the impact on the acquired organisation.

12Less Environmental Impact

With fewer data centres worldwide and more efficient operations, we are collectively having less of an impact on the environment. Companies who use shared processing resources improve their ‘green’ credentials.

Relevant Terms

Software as a Service (SaaS)

A term often used in context of software that is accessible through the Cloud is Software as a Service.

What is SaaS?

eProcurement

eProcurement is the software based automation of procurement processes. Or using Wikipedia’s definition “ is the business-to-business or business-to-consumer or business-to-government purchase and sale of supplies, work, and services through the Internet”

7 ways to transform eProcurement adoption

 

Case Studies

See example Cloud based eProcurement case studies.

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