E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
As procurement chiefs strive to get corporate buyers to spend more efficiently from approved suppliers, the latest crop of e-procurement applications is providing more help, Forrester Research says. But more improvements are still needed, Forrester says.
Corporations for years have struggled to control their employees’ spending on materials and supplies, and early Internet-based procurement systems have been providing assistance since the mid-1990s. But early applications could be rudimentary, without strong features like site search and product comparisons, industry experts say.
In recent years, however, an expanding number of e-procurement applications have been providing those and other web site features to make online procurement easier and making it more likely employees will use online procurement tools to stick to spending budgets and buy form approved vendors, says Duncan Jones, a procurement technology analyst at Forrester Research Inc. The systems are also designed to let buyers more quickly place online orders and provide records of transactions from initial placement of orders to payment of invoices. That not only saves companies time, but it also gives managers a clearer view and more control of procurement processes, he adds.
In a recent report, “The Forrester Wave: eProcurement, Q2 2014,” Jones and other Forrester analysts note improvements in e-procurement systems are appearing in systems tied to back-end enterprise resource planning systems—such as from SAP AG and Oracle Corp.—that integrate procurement tools directly with financial accounting and inventory management applications. There are also competitive offerings from relatively new software-as-a-service providers, which provide Internet-hosted applications that sit outside of a client company’s own technology.
Following are some of the key features Forrester cites in applications from several vendors:
● Coupa Software—Though smaller than some of the other procurement technology vendors, Coupa is building a reputation for its procurement system’s ease of use. It also lets client companies more easily make changes—such as workflows for routing planned purchases for approval by designated managers—often in minutes instead of what can take days or even weeks in other systems.
● Basware—Its Alusta eProcurement application excels in automating the processing of electronic invoices, Forrester says, and its Basware Commerce Network connects with some 170 other networks for reaching suppliers globally.
● Ariba, an SAP AG company, offers a broad suite of software for managing overall contracts and supplier performance as well as managing procurement transactions.
Other companies that Forrester notes as offering strong procurement systems include SciQuest, Ivalua, Verian, Oracle and CapGemini.
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