How Mid-size Enterprises can Protect Financial Health with Intelligent Procurement?
Businesses all over the world took a big hit during the pandemic, but that period was particularly hard for small and medium-sized enterprises (SMEs). In order to combat such situations, SMEs should consider investing in intelligent procurement technologies.
The prime reason for doing so is that intelligent procurement systems can help SMEs increase their financial resilience and stability. However, optimum utilization of such technologies needs proper and strategic handling of the entire process because only then SMEs can reap its benefits.
Before that, SMEs need to know what exactly intelligent procurement is and how e-procurement solutions can help protect their financial health and this post gives you the details on all those things.
What is Intelligent Procurement?
In the simplest words, intelligent procurement refers to the use of software solutions empowered with bleeding-edge technologies like AI and ML for the improvement of a company’s procurement process.
With the help of automation and big data analytics, companies can handle and manage their spending through a more centralized system. By incorporating e-procurement software solutions, companies can gather more accurate information about their expenses and can control the same.
E-procurement platforms can connect multiple vendors to a single platform which can be used by SMEs to check their spending, control overspending, order wisely, and manage invoices accurately.
Ways in which Intelligent Procurement can Protect Financial Health of SMEs
#1 Monitor and Manage Spending
An AI-based procurement system helps procurement teams to keep an eye on real-time expenses. This helps the teams to get valuable insights into a company’s buying patterns, identifying pain points (that is, the areas of extra expenses), and the areas where a company needs to make investments.
This constant monitoring can help procurement teams save extra expenses and do what needs to be done without compromising on the quality of their products or productivity. It also proves effective in making strategic cuts rather than acting irrationally.
#2 Resource Allocation
In times of financial crisis or emergency downturn, it becomes necessary to allocate funds responsibly so that the working capital can be guarded. SMEs can do so by implementing and leveraging the best procurement software systems.
These systems will help businesses gain insights into their current budget and will also highlight the major areas where the funding is actually required, rather than superfluous spending.
By doing so, the procurement systems also help the teams in attaining their financial goals and making optimum utilization of the funding.
#3 Managing and Mitigating risks
Thanks to intelligent procurement solutions, SMEs can manage and mitigate risks and streamline their supply chain with the help of:
- Holistic Solutions: Procurement solutions give companies a complete view of their vendor-related expenses, which also include their risk profiles. Such holistic views empower companies with the information and enable them to prepare by looking for alternative options, thus resulting in holistic solutions.
- Adaptability: The market is a fragile thing and can change its form in a matter of days. The use of procurement software systems means there is more time for procurement teams to spend on strategic planning so that they can keep the company prepared for volatile market situations.
#4 Agility
Staying agile is one of the best ways to tackle financial emergencies or economic crises. With intelligent procurement, SMEs can respond swiftly to the shifting economic conditions.
Based on the current economic status of the market, companies can renegotiate the terms and conditions of their contracts, look for other sourcing choices, and make adjustments to their procurement process. Such proactive measures will ensure that businesses operate smoothly while also keeping their financial health in shape.
#5 Sustainable Procurement
The implementation of intelligent procurement software can help companies achieve sustainable procurement. How? Procurement teams can use the tools and technologies to gather data on vendors and compare their prices, delivery results, and other parameters.
This can help them to get adjust their contracts (based on vendor details) and get the best deals, leading to more savings.
Some Practical Examples of Intelligent Procurement
- Intelligent procurement can help a manufacturing company increase its sourcing options by identifying potential suppliers. In the face of financial disruption, this will ensure that there’s no shortage of raw materials.
- For a retail business, intelligent procurement can be used for inventory optimization and prevention of total stockouts. This can prove quite useful in maintaining sales and revenues as it helps prevent the loss of sales by replacing products on time.
- A healthcare institution can use intelligent procurement to make sure that there is ample supply of critical medical supplies. Through this, companies can make sure that patients continue to receive critical medical care even in times of financial emergencies.
Summing Up
SMEs need systems that can help them combat financial crises without compromising on their operational processes. That’s where intelligent procurement comes in.
SMEs can use the best procurement software systems to monitor and manage their expenses and stay adaptable and agile to the changing economic conditions of the market. However, for a more customized system, businesses can go for customized app development.
