Procurement is an important function within any business, playing a key role in ensuring that the right items are available at the right time and the right price.
In sectors such as construction, procurement is a complex business that involves a wide range of supplies across many vendors. Ensuring that all aspects of the procurement process is correct is critical for maintaining margins and supporting project schedules.
However, ‘getting it right’ using traditional procurement methods requires painstaking attention to detail and many hours of trawling various catalogues, websites, and spreadsheets. The amount of time required by such traditional methods, as well as the margins for human error, greatly contribute to overhead costs and increased financial risk.
The modern alternative to traditional methods is e-Procurement. The construction sector has discussed utilising the rapid advancement of technology for procurement for many years, but has not yet realised its full potential.
A key element in realising this potential is through the development of e-Catalogues that work in conjunction with e-Requisitions.
What is e-Procurement?
The term ‘e-Procurement’ is used, and often misused, to refer to a wide range of procurement activities via the Internet. This could be anything from ordering goods from websites like Amazon through to a fully functioning business-to-business supplier exchange.
For our intents and purposes, the term ‘e-Procurement’ refers to the use of technology to exchange data that relates to the procurement of supplies. In a functioning e-Procurement environment, the majority of the data exchange and validation (e.g. matching purchase orders to invoices) is automated to save time and reduce costs.
What are e-Catalogues and e-Requisitions?
The electronic exchange of trading documents such as requisitions, purchase orders, and invoices is a proven concept. E-Invoicing solutions such as Causeway’s Tradex platform have been increasing the productivity of companies for years.
A more recent technologic development that operates in parallel with e-Trading hubs such as Tradex is the e-Catalogue.
Again, this is a term that is often misused, so it is important to understand that a true e-Catalogue is more than a PDF sales brochure or a spreadsheet that lists all of a vendor’s products. Instead, an e-Catalogue is an online resource that both lists a vendor’s products and enables online ordering and payment.
As such, e-Catalogues deliver many benefits for both buyers and vendors that traditional procurement methods do not.
The difference between traditional methods of procurement and e-Catalogues
There are numerous ways to differentiate between traditional methods of procurement and e-Catalogues.
For example, e-Catalogues make it easy for vendors to include detailed information about their products so that the buyer can assess the suitability of a product at a glance. Traditional catalogues often do not have the same ease of functionality.
Similarly, suppliers can easily update product and pricing information. Updates are automatically reflected across the entire e-Catalogue system, therefore buyers can be confident that they are working with the latest information.
As a result, e-Catalogues are particularly useful for streamlining the procurement of goods and services that are used frequently. This is where the biggest time-savings are achieved.
Once the products have been selected, the buyer can issue an e-Requisition to begin the order process.
Crucially, e-Catalogues from a range of approved vendors can be brought together in a single portal so the buyer only needs to visit one site to meet all his/her procurement requirements.
This ease and speed of functionality can only be achieved by integrating traditional methods of procurement with modern technology.
Bringing it together in Causeway’s Tradex portal
As previously mentioned, Causeway’s Tradex e-Invoicing solution has been enabling companies to exchange trading documents for many years.
The functionality of Tradex has now been enhanced with the introduction of three new modules: e-Catalogues & e-Requisitions, Tradex Document Store, and Supplier Management.
This enhanced functionality for Tradex provides organisations with the ability to create requisitions and purchase orders within an online environment that integrates seamlessly with their Enterprise Resource Planning (ERP) system.
Buyers can select items from a list of products/catalogues which are uploaded into the Tradex portal by suppliers. All products/catalogues are vetted and approved using the Supplier Management module, and all prices are reviewed and accepted prior to being made available for end users to request or purchase.
Once the products have been selected, an e-Requisition is raised and a purchase order can be generated and sent directly to the chosen supplier through the Tradex portal. The supplier can then respond by sending an electronic invoice, also through the Tradex portal.
The value of exchanging trading documents electronically, with automation of key validation processes, is now well established and widely used in many industries.
The development of e-Catalogues and e-Requisitions takes this process a step further, bringing enhanced functionality for buyers within the familiar Tradex environment.
The benefits of e-Procurement are considerable time savings, greater confidence in product information, and assurance that spend is with approved/selected vendors thereby allowing optimal rebates for the company. This results in greatly reduced financial risk for the company.