How does e-procurement reduce costs?


Using the Internet to purchase goods and services isn’t new, but the concept of “e-procurement” has matured to the point where automated procurement is seen as a cost- and time-saver for many organizations.

E-procurement systems are available on-demand or as Software-as-a-Service (SaaS) and can be used in every stage of the buying process, allowing agents to direct spending via purchase orders to preferred suppliers, manage catalogs from multiple vendors, and contract prices quickly and accurately with a seamless user experience.

E-procurement tools include features for creating and managing requisitions, hosted catalogs and supplier-maintained catalogs, purchase order (PO) management, and receiving and reconciliation. These applications allow organizations to monitor and control spend, and they streamline users’ processes for procuring the goods they need to do their jobs.

Lower costs, please

Reduced costs are one of e-procurement’s biggest draws. Such savings generally go straight to the company’s bottom line and are therefore in a different category from the benefits gained through increased turnover, for example. Every organization is looking to save costs & optimize procurement, and why not? Digitization & automation is changing the way we conduct business. Switching to e-procurement most definitely will lower costs for your company.

Major Areas where E-Procurement Helps your Business

Apart from cutting down costs and offering you an easy approach for making purchases, there are three major areas the Digital Procurement is advantageous for.

Better and Organized Process

Instead of using old paper method, utilizing Procure to Pay (P2P) creates an efficient set of business rules. It lets you create and manage business procedures and control points in a better way.

Requisition to Purchase cycle times can be lowered down from weeks to a couple of days.

Contract Compliance 

A major issue organizations face is a shortage of suitable means and reporting capabilities so that they can put their full potential to use. This makes it difficult for them to focus their constituents in using their sourcing contracts. Though, the employees are under pressure to cut down costs and keep a good check of the spending, they lack the proper resources.

Outsourcing Procurement to Procurement partner will ensure they take care of compliance, for you.

Keeping track of Expenses

E-procurement platforms let you keep track of spending with the proper reporting engine. The tool helps analyze spending patterns and let you know which the vendors doing well in the market. Spend Analytics are useful in making more informed buying decisions.


Switching to e-procurement takes away the hassle to engage with in-numerous vendors, managing their invoices, payments, inventory etc. Buying on a digital solution, catering to all categories will help you save time & enhance efficiency.

When is a company ready for a procurement process transformation?

Most companies looking for e-procurement tools have similar business environments and characteristics that make them suitable and ready for software adoption. For example, some of these organizations will be in an important stage of technological transition: They will often be in the process of moving from on-premises to cloud-based software with the majority of their back-office financial systems. These organizations will likely be evaluating a variety of cloud-based business applications at the same time so as to create a holistic transition. Modern, cloud-based e-procurement tools are one of the vital elements in back-office transformations and are often included in these initiatives.

Another factor is an organization’s supplier base. After years of operating with manual, localized procurement processes, many organizations end up with very outdated vendor lists and contracts and are consistently making inefficient purchases simply because that’s how it’s always been done in that company. With cloud-based procurement, organizations have access to online supplier networks with thousands of registered suppliers with which they can connect. They also have access to supplier optimization tools that allow them to clean up their vendor lists, create more competitive contracts and gain more visibility into current market prices.

It is often the case that the organizations that have recognized a need for e-procurement software have run an extensive current state analysis on their procurement departments to determine the full scope of damage caused by manual processes. They have also likely run these numbers against the price of an e-procurement tool, and in most cases, they have found that the possible savings available with automation quickly and greatly eclipses the cost of the e-procurement software itself. These organizations have realized that transformation is the only way forward, and that e-procurement software is not a costly luxury but a strategic necessity.

Does my Business need it?

If you want to cut down your operational costs and enhance purchase department efficiency, then yes!

Switch from paper to an E-procurement platform and be in a better position to manage your indirect spend, efficiently.


ProTaiga offers Procurement Transformation to organizations by plugging in a robust, enterprise platform. We can simplify buying for you. Get in touch!

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Author – Aval Sethi, Founder

Aval Sethi is the founder & CEO of ProTaiga and is based in New Delhi, India. As a result driven entrepreneur, Aval leads Business Transformation and Procurement Automation initiatives focusing on new-age innovation for businesses through his company.

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