Procurement software
Encyclopedia
Procurement software is business software
that helps to automate the purchasing function of organizations. Activities including raising and approving purchase order
s, selecting and ordering the product or service, receiving and matching the invoice and order, and paying the bill is handled electronically, enabling the procurement department to see everything that is ordered, ensure that nothing can be ordered without correct approvals, and lets them get the best value by combining several orders for the same type of good or even getting suppliers to bid for the business. There are literally thousands of e-Procurement software providers. Procurement software comes in industry specific forms, such as Translizer
for translation industry and Adaco for hospitality industry or generically for all types of spend from software vendors like Ariba
, SAP
or Oracle
. Buying organisation's choice can be driven by the particular strengths offered by each individual system and the number of vendors available through them. A multinational or otherwise large organisation will use a shared procurement system to take advantage of economies of scale
to drive down the cost of purchases. Whilst some services are available to purchase through automated systems, the key strength of these systems lies in the procurement of commodities that are much easier to standardise.
The key benefit for organisations using procurement software include ease of administration and potential long-term cost savings. Having a single interface for procurement related management information cuts down the time and effort required to monitor organisational spending. The use of such software also allows procurement managers to control the vendors used by the wider organisation so all employees take advantage of negotiated rates and other terms of service.
Business software
This article is about software made for business, if you were looking for the business of selling software, see Software business.Business software is generally any software program that helps a business increase productivity or measure their productivity...
that helps to automate the purchasing function of organizations. Activities including raising and approving purchase order
Purchase order
A purchase order is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a purchase order to a supplier constitutes a legal offer to buy products or services...
s, selecting and ordering the product or service, receiving and matching the invoice and order, and paying the bill is handled electronically, enabling the procurement department to see everything that is ordered, ensure that nothing can be ordered without correct approvals, and lets them get the best value by combining several orders for the same type of good or even getting suppliers to bid for the business. There are literally thousands of e-Procurement software providers. Procurement software comes in industry specific forms, such as Translizer
Translizer
Translizer Group, commonly known as Translizer, is an international technology company with offices in Portsmouth, United Kingdom and Houston, Texas. Translizer's core operation is the facilitation of foreign language translation through an aggregator search function similar to sites like...
for translation industry and Adaco for hospitality industry or generically for all types of spend from software vendors like Ariba
Ariba
Ariba is a software and information technology services company located in Sunnyvale, California.- Early life :Ariba was founded in 1996 by Bobby Lent, Boris Putanec, Paul Touw, Rob Desantis, Ed Kinsey, Paul Hegarty, and Keith Krach on the idea of using the Internet to enable companies to...
, SAP
SAP AG
SAP AG is a German software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Baden-Württemberg, with regional offices around the world, SAP is the market leader in enterprise application software...
or Oracle
Oracle Corporation
Oracle Corporation is an American multinational computer technology corporation that specializes in developing and marketing hardware systems and enterprise software products – particularly database management systems...
. Buying organisation's choice can be driven by the particular strengths offered by each individual system and the number of vendors available through them. A multinational or otherwise large organisation will use a shared procurement system to take advantage of economies of scale
Economies of scale
Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...
to drive down the cost of purchases. Whilst some services are available to purchase through automated systems, the key strength of these systems lies in the procurement of commodities that are much easier to standardise.
The key benefit for organisations using procurement software include ease of administration and potential long-term cost savings. Having a single interface for procurement related management information cuts down the time and effort required to monitor organisational spending. The use of such software also allows procurement managers to control the vendors used by the wider organisation so all employees take advantage of negotiated rates and other terms of service.