Disadvantages of E-Procurement

Considering the implementation of new software tools or systems is a process that should always include an acknowledgement of the challenges and disadvantages associated with those tools, and this concept applies to e-procurement systems as well.

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It’s easy enough to find the advantages and benefits of using an e-procurement system. All it takes is a quick Google search to be surrounded by forests of praise, cost-savings, and efficiency enhancing features.

There’s also this comprehensive list of 20 advantages of using e-procurement systems.

But when it comes to addressing the real challenges and potential disadvantages of e-procurement systems, reading about the difficulties that procurement professionals have encountered in the past is the best way to find the right questions to ask before buying-in.

The team at Tradogram understands this, and has been designing a procurement software solution with these obstacles in mind to overcome them and ensure that the traditional disadvantages of e-procurement are minimized - or eliminated completely in many cases.

For convenience, this list has been compiled to highlight some of the most commonly addressed disadvantages of e-procurement systems to ensure that your procurement team has full transparency during the e-procurement sourcing process.

Traditional Difficulties of Implementing an E-Procurement System

Implementation is sometimes taken for granted by companies who are considering an e-procurement solution. This can cause the tool to perform poorly, and in other cases, can cause a great deal of time and money to be wasted on an improper roll out of the new system.

Testing and Evaluation

From experience with thousands of companies, Tradogram has noted that it takes, on average, 3 weeks for businesses to feel comfortable enough to conclude the testing process for a new piece of software. A majority of e-procurement platforms offer only 7 days - or no option at all, to allow for the testing of their platforms!

Tradogram provides the option to create a free account for new users to become acquainted with the platform. There’s no time limit on the account, giving ample opportunity for evaluation.

It’s always a good idea to test out any new software platform (even outside of e-procurement) thoroughly before buying-in.

Cost

Many e-procurement systems are very expensive. While the tools these platforms offer are often effective, the associated price tag places them out of reach for many mid-sized organisations.Tradogram has addressed this issue with a straightforward pricing model. A single, affordable monthly-fee provides premium access to the full system, with no additional cost-per-module.

This is especially true for ERP (Enterprise Resource Planning) systems, which also typically fail to meet procurement needs thoroughly with the tools they offer. More on avoiding the common ERP trap later.

Team Compliance

This is the most critical element to consider, and one which is frequently overlooked by businesses. Just because an executive decision is made to use an e-procurement system does not mean the entire organization will comply with or understand how to use the system.It’s always recommended to include all stakeholders in the software sourcing process. This ensures that management has proper oversight and the opportunity to provide feedback on each platform in the sourcing event.

Operational Challenges of E-Procurement Systems

E-procurement systems are not always equipped to handle every purchasing scenario effectively. Here are some factors to keep in mind when transitioning from a traditional procurement process to e-procurement:

E-Procurement Systems are Not Bespoke

In the instances where an e-procurement platform offers custom development, the price point on that customization can quickly begin to outweigh the benefits of the system itself.In addition, over-customization of a platform can end up making a system too complicated for general use, negating the advantage of using the system for a majority of the employees using it.To overcome this challenge, businesses are encouraged to find systems that are simple, flexible, and affordable enough to meet their needs, while strategically planning how their current process will transition smoothly to adapt to the new system.

Supplier On-Boarding

In some countries and industries, suppliers may not always feel comfortable using online tools to handle a response to purchase orders they receive.When this is the case, it’s important to have tools available on the chosen e-procurement system for documenting physical paper order responses, invoices, and expense records.To make the most use out of an e-procurement system, it’s also wise to update existing supplier lists to include tech-savvy companies that will be willing to engage in transactions with your business through the use of modern e-procurement tools.

Item Catalogs are Not Always Enough

While item master databases are convenient, in many circumstances, items may not be present on an e-procurement system or have prices that fluctuate regularly.When purchases need to take place for items that aren’t present on the system, an intuitive and agile way to enter one-time purchasing data is a must-have for many businesses.A company should consider which goods and services it orders on a regular basis, and ensure that the e-procurement solution they choose is capable of handling their diverse purchasing requirements.

Bad Reviews About Various E-Procurement Systems

To gain a realistic understanding of the problems that users sometimes have with e-procurement platforms, a list of real-user review submissions can provide a great deal of insight.

The names of the companies and individuals have been redacted to provide an unbiased, constructive environment for consideration.

When sourcing an e-procurement solution, keep an eye out for similar problems to ensure you’re able to avoid these pitfalls!

Customer service is an especially important factor to consider for an e-procurement system. Due to the complicated nature of implementation, and the wide variety of different business use-cases, having help resources and live support channels is a must for any company looking to get into e-procurement.

User experience and fluidity of use are two more aspect to consider in a piece of software. Tying into the first negative review, the less time your team has to spend on figuring out how to use the software, the more quickly it can be implemented. The efficiency of a digital workflow is also determined by UX, so make sure the software meets your team’s standards.

Over-complicated systems are detrimental and cause internal compliance to falter. While custom features, “bells and whistles”, and diverse integration can all seem desirable at first glance, an over-abundance of features can add unforeseen complications to workflows. Be careful what you wish for!

Ensuring the tool is designed with an understanding of the profession is a must. Always describe your workflows as accurately as possible, and don’t be afraid to get into the details of what kinds of tools you’re looking for in a new system.

ERP systems are a common trap that mid-sized organizations fall for. While they’re marketed as being comprehensive by nature, the dedicated tools that these systems offer for purchasing are often insufficient to handle the needs of a complicated procurement process.You'll want to read more about ERP systems vs dedicated procurement software before making a final decision on such a large investment, as failed ERP implementations are incredibly expensive (both in time and money).

Overcoming Disadvantages to Reap The Benefits of E-Procurement

To get the most value out of an e-procurement system, it’s important to fully understand the pros and cons associated with buying into one. Businesses should consider the way their purchasing process currently works, what their strategy for implementation is, and what the limitations of each system are (as mentioned earlier, no system will be 100% bespoke).Finally, the best way to overcome the disadvantages of e-procurement is to ensure that you’re dealing with a platform that understands the needs of your business. Be sure to prepare a list of requirements to share with any product expert you speak with, and confirm that the features you’re looking for are present on the system for a smooth implementation.