How the Right Software can Improve your Procurement Planning

Without a plan, even the best intentions can go awry. Procurement is no different, so it is important to make sure you have one from the get-go. A well-built plan will provide you with a clear overview of what the procurement journey will look like and keep your sourcing strategy in focus.

It doesn’t need to be hard to make sure every procurement event is properly planned before being executed. Below is a list of 10 ways software can make things easier.

1. Guide Procurement Decisions According to an Organisation’s Policies

An interactive policy guide can be a useful tool to ensure the correct procurement path is followed based on various criteria, such as cost bracket, risk level, the items being purchased, etc. The solution will channel the user to the appropriate procurement plan based on your organisation’s policies. This helps to simplify an otherwise complicated procedure.

2. Standardisation and Organisation-Specific Business Rules

Each organisation has different business rules, often related to its industry, and these can be used to create a standardised approach to procurement. A Procurement Planning solution leads users step-by-step with a series of questions that populate parameters and provide relevant information to ensure the plan is properly formulated. The planning data can then be carried through to the next steps of supplier discovery and going-to-market. This results in less risk and better, faster RFx management.

3. Increased Control of Procurement Spend

Procurement specialists need to keep an eye on spend management. Since every action is recorded by a software solution, all the data entered at the planning stage can be used later for reporting and analysis. Useful metrics, such as spending patterns, can inform future buying decisions and financial management. Additionally, maverick spend is easier to spot so that spend under contract can be maximised.

4. Ensure Compliance with Automated Workflow Rules

One of the concerns of procurement and contract management practitioners is remaining compliant to both internal and external policies. With the right software solution, compliance policies can be built into the automated workflow steps, and this needs to start right at the planning stage. Having compliance encoded gives you peace of mind that you are safely adhering to all governing policies.

5. Upfront Risk Assessment

The results of a risk assessment can change the route of a procurement process. Procurement Planning solutions can use a risk matrix to evaluate financial, legal and process risk which will then inform further decisions. Having risks assessed at this early stage can spare an organisation a lot of grief later down the line.

6. Fewer Errors with Reduced Manual Handling

Manual handling of the large number of documents, timelines, notifications and procedures that make up a procurement lifecycle is vulnerable to human error. Instead, planning solutions automate these tasks, for example, having a digitised checklist to keep make sure no important criteria are overlooked.

7. A System-Generated Timeline

As soon as an end date is decided, Procurement Planning solutions automatically generate a dynamic timeline of events, which will then work with automated notifications and dashboards to keep everything on track. The whole end-to-end process can be mapped out - with key milestones set - and viewed in one place.

8. The Right People at the Right Time

As part of compliance regulations, only employees with the right level of authority can sign-off on certain steps in the procurement workflow. Procurement Planning solutions allow you to designate authority to set up automated approvals as per an organisation’s roles and permission structures.

9. Optimise and Save with Strategic Procurement

Every organisation should have a sourcing strategy that informs procurement decisions. Technology can help set this strategy in motion by systematically structuring a procurement plan with the organisation’s broader priorities built into the guiding workflow questions and pathways. This secures a solid foundation on which the entire Source-to-Pay lifecycle rests.

10. Build ESG into Procurement Planning

Nowadays, Environment, Social and Governance (ESG) should be part of a company’s procurement policies, and these considerations should not be an afterthought but should inform key sourcing decisions. Procurement Planning solutions can help keep this concern in mind, for example, by making sure ESG-related questions form part of the initial planning workflow questions.

Procurement Planning is the first – and crucial - step in a complete procurement and contract lifecycle. From this stage, data moves automatically from planning to the sourcing stage and beyond. With a well-formulated plan, sourcing suppliers, going to market, evaluation, contract award, and on through to the contract’s end, can all be handled smoothly.

Include Procurement Planning in your Source-to-Pay Activities

VendorPanel’s Procurement Planning module works with the whole suite of Source-to-Pay modules to deliver an automated, integrated and secure procurement and contract management experience. Contact us to learn how adding Procurement Planning to your toolbox can transform your procurement activities.